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Essay / Asos Case Study - 901
Nevertheless, due to the challenge of operating in China and the loss of profit in the Chinese market, in April 2016, ASOS decided to end its operations in the country, which meant that ASOS could not survive in the Chinese market and failed.(2) Reasons why ASOS enters China The study identifies three main reasons why ASOS entered the Chinese market. The first reason is the strong purchasing power of the Chinese people. (2.1) Disposable income Table 1 Source: National Bureau of Statistics of China, 2014. “Table 1” shows that the disposable income of Chinese people continues to increase stably, from 10,493 million yen in 2005 to 24 564.7 million yen in 2012. “Table 2” shows that total retail sales of consumer goods in China have also increased steadily over the past year. (2.2) Retail sales of consumer goods Table 2 Source: National Bureau of Statistics of China, 2016. According to “Table 1” and “Table 2”, Chinese people both have increasing disposable income and are very willing to go shopping. Therefore, the Chinese market tends to be very profitable for ASOS. Gaining a large market share is the second reason why ASOS enters the Chinese market. (2.3) Chinese population Table 3 Source: National Bureau of Statistics of China,