ASOS industry report

discover fashion online

Expansion Marketing Strategy In Brazil

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Word counts : 3797

Meng-hsi Chin International Fashion Business N0595266

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C ontent Executive Summary 6

Methodology

Company Profile

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Introduction

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The Market

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The Consumer

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Adapted Marketing Mix 32

Recommendation

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Executive Summary 6

The main aim of writing this report is to critically analyse the opportunity to expand to Brazil market including analysis of Brazil consumer behaviours and the situation of e-commerce in Brazil. The Major finding shows that Brazil consumer has its unique spending habit such as different region has different preference of clothes buying habit, and further discussion examines ASOS under the frameworks of fast fashion industry and e-commerce is to understand the current ASOS business model and the strength of going global. Also, due to the cultural differences and language, to critical analyzing the adapted marketing mix strategy that ASOS could employ in Brazil market.

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Adopting

quantitative research method, this report is

devoted to get inclusive insights in Brazil market and Brazilian consumers. The report mainly carries out through researching related articles about ASOS, Brazil's consumer behaviours, latest business trends in Brazil, fast fashion industry and e-commerce market environment. Further research is to focus on academic journal article and books about business model and theory, which can be applied in this report. The report has employed product life cycle to demonstrate emerging market, Marslow's hierarchy of needs to explain the business model of ASOS and adapted marketing mix to illustrate marketing strategy in Brazil. A critically analyze macro and micro environment which in terms of PESTEL (Appendix 1) and SWOT (Appendix 2) analysis. The primary research is through online questionnaire to get the local Brazil consumers' bevaviours and preferences.

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Methodology 9

Company Profile

“As Seen on Screen� commonly known as ASOS is a pure-play e-retailer. ASOS is a public limited company (PLC) owned by shareholders and shares can be purchased by the general public. In June 2000, ASOS set up the first office in London by Nick Robertson and Quentin Griffiths (hybris, 2013).

ASOS is a leading market of online fashion retailor in the UK. It sells own-label products, independent designer products and over 65,000 branded products across menswear, womenswear, accessories, footwear and beauty products on the website. ASOS uses the web channel to sell its products, since researchers indicates that online sales have been growing rapidly than any other sector, also 60% of online shoppers are young people (Mintel, 2013).

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Thus ASOS targets its customers on 16-34 years old with fashion conscious. Today, ASOS sells products through nine languages website: UK, US, Spain, Italy, France, Germany, Russia, Australia and China. ASOS has millions of visitors per day and it ships for free to customers in 240 countries. ASOS’s total sales up 40% (UK sales up 34% and international sale up 44%) and continued to global expansion, international total sales now have 63% at end of August 2013 (ASOS, 2014).

The key success of ASOS is that through out social media to connect with customers including 2.6 millions likes on Facebook, 2.2 millions followers on Google plus, 1 millions followers on Instagram and 540k followers on Twitter (hybris, 2013). ASOS allows its customers share their own creating styles and ideas on the social media. Also ASOS creates multiple channels to get in touch with its customers. When customers visit ASOS searching the latest fashion trends, talking about ideas and shopping, customers can use laptops, mobiles phone and tablets to reach ASOS.com (THEDRUM, 2013).

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Introduction

ASOS had seen rising sales in UK and international markets between 2011 and 2013.

International markets are the key driver of ASOS’s growth, which represents 44% of growth. ASOS is doing well in foreign countries where it has launched websites such as France, Australia, Spain, Italy and the US. In 2013, ASOS launched websites in Russia and China. ASOS intends to target the Chinese market with 420 millions potential customers. ASOS provides free shipping and returns on its products to every destination countries globally. This commitment helps reduce the risk to customers and let them know that products can be returned surely (Mintel, 2013).

ASOS has had ambitious to go internationally since 2010. ASOS has launched the American, German and French websites in 2010, launched Italian, Australian and Spanish websites in 2011 and launched Russian and Chinese websites in 2013 (ASOS.PLC, 2014).

As Mr. Nick Robertson said that “the next phase of expansion will be in Korea and Japan followed eventually by India and Brazil” (see as THE INDEPENDENT, 2014). It can be seen that ASOS is targeting BRICs markets. This report will focus on ASOS expanding to Brazil market. Further discussion will be the current Brazil market analysis, Brazilian fashion insight and future expansion recommendation for ASOS.

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The Market 14

Brazil market Brazil is the most prominent country in South America, it has large economy scale and the one of the biggest democracy countries in the world. Also Brazil is one of the BRICs nations together with Russia, India and China. Brazil’s economy grows steadily, it helps its country get rid of penury (BBC, 2014).

Product life cycle (Figure 1) can be applied in Brazil's market to analyse the potential force on economy. Brazil is a developing country with fastest economic growth in the world, it has already in the growth stage and become a significant strength on the world's economy with other BRICs countries (Mondaq, 2014). Moreover as emerging markets have been growing, developed countries such as UK and US are in the maturity stage, which means their markets have been shrinking and about to go to decline stage (Blackrock, 2013).

The boom of economy has introduced 40 millions Brazilian into consumer market. It helps consumers move from the poorer “D” and “E” classes to the middle “C” class over the last decade. The “C” middle class is made up of people who used to live in the poorest rural areas. These people had very low incomes, but after Brazil’s economy rises, they have benefited. And now their incomes reach to middle class level from average R$320 ( £85) to R$1,120 ( £299) monthly. The majority of population (54%) belongs to “C” class, thus they are contributing to the majority buying power of $ 54 billion and country’s credit (58%) more than A, B, D and E classes (WGSN, 2014).

Figure 1 Product life cycle

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Fashion industry in Brazil The Brazil fashion market has significant growth in recent years, from both inside and outside factors. For international fashion brands, Brazil's economy growth provides opportunities for those well-known international fashion brands to make investments in Brazil such as Chanel, Gucci, Louis Vuitton and Burberry.

For domestic brand, Brazil is the only one of the BRICs nations with a major fashion industry. There are many famous Brazilian brands which have highly success globally such as Osklen, Colcci, Ellus and Havaianas (BOF, 2010). Also Brazil is one of the pioneers of textile and clothing industry with more than US$6 billion investment in machines, product lines and labours. Fashion designers are very pleased that the whole supply chain and production can be finished within Brazil (Sobotta, 2001).

As for fast fashion retailers, Brazil market is a land of opportunities. Many international fast fashion brands arrives Brazil in the flow of globalization in recent years. For example, C&A - the first international brands located in Brazil in 1976, Zara, Forever 21, TopShop and.

Due to the millions of Brazilians break away from poverty and get into the middle class, the consumption has been the key motivator for Brazil's economy in the past few years (BOF, 2014).

Figure 2. Fashion Perceptual map

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Competitors analysing Recent years, Brazil has become the battlefield for fashion retailers. The growing of fashion industry is from both inside and outside. Due to the reason that all fashion brands want to gain market share in Brazil, the competition between international brands and local brands will be tremendously fierce (BOF, 2014). By analysing the competitors in Brazil for ASOS, it includes fashion retailers on e-commerce and international fast fashion brands.

e-closet e-closet is one of the most successful e-commerce fashion retailer, which provides local designer labels and international brands from luxury to fast fashion clothing. At earlier times, Brazilians were only familiar with the domestic brands, but e-closet was the pioneer to introduce international brands through the Internet to Brazil market (NYtimes, 2011).

MercadoLibre MercadoLibre is a leading e-commerce player in Brazil, which offers a platform for small individual shops. Product ranges are widely from kitchen appliances, cheap clothes, to luxury clothes (MercadoLibre.com.br, 2014). The primary research shows that MercadoLibre is the most popular e-retailer where Brazilians purchase clothes (Figure 3).

Amazon and others Amazon was entry in 2012; the primary research shows that only 15% of people buy clothes on Amazon. The reason of the result is that Amazon has been more focusing on selling e-books and Kindles (Sramanamitra, 2014). Only 10% of people buy clothes from other e-retailers and foreign e-retailer including ASOS (Figure 3).

Figure 3. The websites that Brazilain buy most for clothing.

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International fast fashion brands in Brazil.

Fast fashion brands offer lower price and targets their customers in the middle class.

Gap sells its collection six months behind in US and other European countries. Said by the GAP’s marketing manager in Brazil - Carolina Correa “As the seasons are inverted, we work on the reversed seasonality mode. We work with a six-month delay in comparison to the Northern Hemisphere”. However, Topshop sells the same collection at the same time with UK because Topshop wants to distinct itself between other international and local competitors. As for C&A, the first entrant international brands in 1972. C&A has become the largest fashion retailer in Brazil. Its product collections are highly customized to the Brazil market with colourful and dynamic brand promotion, now C&A has over 260 stores in Brazil (BOF, 2014). ZARA set up its first store at the end of 1990s and it has customized “Brazilian look” for Brazilian customers. Directors of ZARA said, “Investing in Brazil could lead to a 50% share of the Latin America market” (see as Sobotta, 2001).

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The business model of ASOS

Solomon and Rabaolt states that Maslow's hierarchy of needs can be applied in fashion market to illustrate that fashion can satisfy needs at every stage in the hierarchy (Solomon and Rabaolt, 2004).

ASOS’s business function can be explained by Marslow's hierarchy of needs (Figure 4) which can also demonstrate how consumers' needs to be fulfilled.

At physiological stage, ASOS offers varieties of fashion brands and own tailored products to fashion online shoppers. ASOS promise their customers to shop what they have seen on screen easily.

At safety stage, ASOS provides free shipping and return policy locally and globally to every destination to reduce the barriers of tangibility and delivery cost (Appendix 2). ASOS satisfies the social stage by engaging with target customers on social media.

Through posting relevant issues of fashion topic on integrated social media, ASOS has earned credibility with 20-something fashion lovers all over the world (Marketing Excellence, 2013).

It is also a platform for fashion lovers to share ideas, find out fashion trends and get inspiration from others (Appendix 2).

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The esteem needs stage, ASOS dedicates in developing of channels. While other fashion retailers are adapting the trends of e-commerce business, ASOS is already ahead of them (Marketing magazine, 2011). ASOS creates multi-channels shopping experience and keeps itself up-to- date to the newest technology to ensure there is no channel has been missed out.

ASOS has launched its own magazine since 2007. And now with “shoppable� technology allows customers using smartphone to scan every item on the ASOS magazine to shop from ASOS mobile site (Appendix 2). ASOS is the leading fashion retailer on the e-commerce with very innovating business model, and ASOS claims its ambition is to become the world's number one online fashion retailer for 20-somethings fashion lovers at its self-actualised stage (ASOS, 2014).

To become the world's number one online fashion retailer for 20-somethings fashion.

Developing of multi-channels and innovating technologies, such as shoppable technology.

Engaging with customers on socail media sites.

Free shipping and Return policies.

ASOS offers over 65000 branded prodcuts on its website.

Figure 4. Marslow's Hiereachy of needs.

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The Consumer

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Brazil e-commerce consumer The driver of e-commerce growth in Brazil is mainly because of the Globalisation.

International trading and business alliances are driving the spread of e-commerce.

Globalisation is closely related with adopting communication technologies. More and more firms in Brazil started e-commerce business. Due to the factors of both international and local Internet users being online (figure 5) and (figure 6), the Internet technology is rapidly forcing business change (Tigre and Dedrick, 2004).

Figure 5. The numbers of Internet users in Brazil has 99.2 million users in 2013 to grow to 125.9 million in 2018.

Figure 6. The numbers of Internet users in the world has dramatic growth to reach almost 3 billion in 2014.

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Online shopping The Brazil e-commerce market is the most attractive and important market due to the shortage of shopping places apart from the major cities such as São Paulo and Rio de Janeiro (WGSN, 2013). The e-bit consulting company released a study shows that Brazil e-commerce market sales rose 28%, came to R$28.8 billion (US$12.2 billion) in 2013. Over 50 million Brazilian bought product through Internet and more than 80 million orders had been made (pulsosocial, 2014). According to IBOPE (Instituto Brasileiro de Opinião Pública e Estatística—in Portuguese; Brazilian Institute of Public Opinion and Statistics), the most products that Brazilians have bought online are clothes, perfumes, books, DVDs, cell phones and sneakers. The majority of Brazilian online shoppers are aged 25-34 with household income around R$1,000 to R$3,000 (US$500 to US$1,000). In addition, Brazilian women are in charge of 52% of buying clothes online (Latin Link, 2013).

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Social media Social network has a big effect on online shopping. Brazil’s new middle class goes online dramatically, and social media is especially popular because of Brazil’s hyperculture (Edelman Digital, 2012). Figure 7 shows that the numbers of social network users in Brazil has 76.4 million people in 2014. And it is forecasted that social network users will continue growing to 94.5 million 1n 2018 (Figure 7).

According to Ipsos research shows that 69% of Brazilian social media users will buy the products after seeing the ads from social media. And 66% of Brazilian social media users will make a purchase after reviewing a post. In addition, 42% of Brazilian Facebook users seek for advices and opinions about products from social network (see as Latin link, 2013).

Media consultant company eCRM123 found that 94% of Brazilian social network users are willing to engage with brands to receive customer assistances and products information through social media. An acceptance to engage with brands for additional customer service on social media site could have big opportunities on e-commerce in Brazil. eCRM123 also found that 77% of Brazilian social media users had affirmative attitude toward shopping on social media (see as eMarketer, 2013). Moreover, Brazilian consumers are welcome to trade information for customer assistances via social network. Cisco Systems survey suggests that 60% of Brazilians are willing to trade their personal information and purchase histories for more recommendations and personalised services (see as Latin link, 2013).

Figure 7. The numbers of social network users in Brazil.

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Celebrities and Bloggers Endorsement Celebrities and local soap stars have big influence on Brazilian customers. Especially in the middle class and low class. Brazilian people have used to follow celebrities’ fashion taste from both foreign and locally. The clothes or brands that are worn by Brazilian soap stars will become a trend in Brazilian society (Celebrate Brazil, 2012). For example, Hering - a local basic-style clothing brand works with young TV celebrities, now Hering is highly recognized by the general population (WGSN, 2014).

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Brazil has a big number of blogs devoted to the fashion area which are followed by young consumers such as Garotas Estúpidas - the Brazil’s well-known and most visited blog and F*Hits - a group which organises a network of 24 bloggers and has more than 5 million visitors every month. Due to Brazilian young adults have less leisure time and busy at work, they are looking for a shortcut to purchase fashion and searching for opinions about fashion. Consumers investigate the products before purchase and pay attention on the comments from other customers and celebrities (WGSN, 2014).

In Brazil, bloggers have become a window of online shop, by displaying pictures of products on the websites with a link. According to Farfetch’s brand manager - Daniely Von Atzingen, “involving bloggers in e-commerce has proved to be very successful” (WGSN, 2013).

Payment Brazilian consumers usually purchase everything in installments from clothing to products in supermarkets (BOF, 2014). As the outcome of installments habits, the new middle class stands for more purchasing power. Consumers invest in brands even though the products prices are higher than they can afford to pay in once (WGSN, 2013). Thus fashion retailers provide installments of payment with no extra interests, which make purchasing more affordable for Brazilian customers (ATkearney, 2012).

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Location Brazil has variety styles in different regions and cities. Each city has it own style and taste of fashion, culture and spending habits. The easiest way to distinct the fashion differences are location. Brazil can be divided into three major climates: North region - Equatorial zone, Middle region - Tropical zone and South - subtropical.

Figure 8 is conducted by primary research, which shows that each region’s online shopping habit with 46% of people from south region, 34% from middle region and 20% from North region.

Figure 11. South region

Figure 8. Peop regions South region South region is in the subtropical zone where has four seasons. The cities in here are much modern such as São Paulo and Rio Grande Do Sul. Seasons in Brazil are reverse with USA and Europe. The coldest month is mainly in July, the temperatures are between 10 °c and 15°c (BBC weather, 2012). Consumers tend to like buying fashion clothes with 39.1%, casualwear is followed by with 29.3%, beachwear and working wear are 10.9% and 20.7% in south region.

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Figure 9. North region

North region North region is in the equatorial zone where is very hot and humid (BBC weather, 2012), the major cities are Manaus, Belem and Ceara. People in here tends to like buying casualwear with 42.5%, fashion clothes are followed by with 32.5%, beachwear and working wear are 10% and 15%.

Figure 10. Middle region

ple from different

Middle region Middle region is in the tropical zone where the climate is more complex. It can be categorised into west with hot and humid and east coast with warm humid and rainy weather (BBC weather, 2012). Major cities in this zone are Rio de Janeiro - coast city, Brasilia - capital city and Salvador. Customers’ online shopping habits are in average with 26% of casualwear, 29.4% of fashion clothes, 16.1% of beachwear and 27.8% of working wear. Due to the fact that Capital city is in the middle region, people live here have much higher income and most of them are politicians and business people. They tend to purchase working wear more than other regions (Sobotta, 2001).

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Adapted Ma

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arketing Mix

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Adapted marketing mix

Expansion of international markets requires customizing marketing strategies for different places of the world. Due to the differences of culture, region and nation, companies have to adjust the right strategies to suit local markets. In order to target and give the right services, international companies have to understand local markets’ culture, consumer needs, politics, technology and economy (Vignali, 2001). It is essential that ASOS has awareness of understanding Brazil’s unique culture and market. Thus ASOS could adopt the adapted marketing mix strategies for its expansion in Brazil market.

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Product Product adaption represents the range what the physical product differs from national boundaries. Product adaption can make competitive positions stronger and help companies respond the demand of unique tastes on segments (Powers and Loyka, 2010).

Cross analysing the primary research’s data, Brazilians buy the most products online is fashion clothes with 34.5%, the second most is casualwear with 31% and working wear is 22% (Figur12). As ASOS offers mainly fashion clothes on its website, it could be an advantage for ASOS. However, casualwear and working wear is the second and third most products that Brazilians buy.

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Figure 12. What clothe you buy most online.

By using fashion curve (Figure13) to analyse products, fashion product’s life cycle is much shorter than classic product. Classic product in terms includes casualwears and formal business wears (Lamb et al, 2010). And combine the data of casualwear and working wear shows that classic products (53%) are higher than fashion clothes (34.5%).

Fashion curve also indicates that classic product could last longer and gain market share in the long-term.

It is important that ASOS takes casualwear and working wear into account to start launching more classic products for Brazil market.

Classic Fad

Fashion

Figure 13. Fashion curve.

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Price ASOS's global pricing strategy is a standard system apart from 8 local websites. ASOS has to translate the prices to adjust the Brazil market due to the Brazil has indirect import tax with 35% (Appendix 1). In the mean time, ASOS has to maintain the profit; the pricing strategy has to be higher in Brazil. However, Brazil has its unique installment culture. Brazilians tend to pay separate times rather than pay it all in once.

Brazil's retailers usually offer installment to customers between two and 60 times with interest-free. Says Prof Rocha:�The installment culture encourages you to take on more debt; it creates an emotional need to buy even more� (Financial times, 2013). Thus, it is important that ASOS adapt to installment culture.

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Promotion Kotler (1996) states that promotion is a marketing communication tool that includes advertising, public relation, sales promotion, direct marketing tools and personal selling. The company uses promotion to convincingly communicate customer value and built a relationship with customer. Promotion has to be adapted in different countries, which means advertising should be produced to suit local countries, culture and region (Meyer and Bernier, 2010).

As earlier mention that the number of social media users in Brazil has 76.4 million and 94% of them enjoy engaging with brands' social media site so that it is beneficial for ASOS due to it is ASOS's main strategy to engage with customers. Also, in 2013 a study shows that Brazil's social media users enjoy humorous contents that brands post on social media site. Which suggests that engagement on social media sites have been the most frequently and effectively way in Brazil (eMarketer, 2013).

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Recently, companies have been dramatically associated with celebrities and bloggers in Brazil, and as result celebrities and bloggers have varied influences on consumers' decision making. Celebrity and blogger endorsements contain of using celebrities' publicity to associate with products or services in terms to build up public relation. Products connect with celebrities to be seen have great impacts on consumers. The chosen of celebrities' characteristics have to be match with companies' business sector to make the endorsement works.

Otherwise, it will end up selling product rather than build up identity of brands. Thus, the successful operations of campaigns are consequence of accurately matching celebrity and the message to the brand (Boeing and Schurhaus, 2014).

This is important that ASOS takes celebrity and blogger endorsements into consideration to set up a identity in Brazil.

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Place ASOS is a pure-played online retailer, it doesn't have any physical shop on the streets. E-commerce requires on any form of online interaction-transaction, and website mostly is the main counter. Website fulfills the digital form demands (such as online music, software) and physical distribution by delivering the product. For online consumers, the experience shopping online consists of many other elements such as easy to navigation, easy to shop, quick respond and payment method. All above these elements would be the factors for consumers to visit the website again or not (Constantinides, 2002).

According to Singh and Pereira (2005), international companies should value the localisation and customisation of website as global strategy for international expansion. As the result, local online consumers usually prefer local tongue content on the website (Alhorr et al, 2010). Which suggests that ASOS should adapt to Brazil's local language - Portuguese and cultural preferences.

In addition, place on e-commerce also can refer to multi-channels (Smith and Chaffey, 2002). ASOS claims that it provides multiple channels via website, mobile site and APP where 20-something can explore fashion (ASOS, 2014). Recently, m-commerce is on the growth in Brazil. Research suggests that 27% of mobile devices and 38% of tablet devices have been used to make purchase in Brazil (Appendix 1). Thus, ASOS should seizes the opportunity to launch local multi-channels along with local website in Portuguese.

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Recommendation

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Partnering As ASOS is a new entrant to Brazil market, it is highly recommended that ASOS finds a local player to gain more market share and overcome other obstacles in Brazil.

Partnering with local companies is required in some cases when foreign companies want to enter to new markets where the markets have differences of cultures, business functions, social and languages than foreign companies.

Local partner companies could offer local market knowledge and contacts in order to target the right customers (Tradestart.ca, 2014).

Collaborating with local companies has the potential to create “win win� situation, allowing the new market entrants to ask local partners to provide the current existence and local market knowledge in order to set up operations, create market share and overcome local barriers. The local alliances also could offer a less-cost way to enter the market, by reason of local alliances have already established their footprints within the market (Accenture, 2011).

As Madhok (1997) argued that local firms could accelerate foreign firms enter into the market, share costs, risk, harmonise the product and market and lessen time to the market. Also local firms could offer helps for dealing with countries’ regulation and resources for deploying to compete with other competitors (see as Doh, 2000).

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List of illustration Fig 1: Handford, A 2014. Product life cycle. Lecture notes at Nottingham trent University.

Fig 2: Fashion perceptual map. [Own diagram].

Fig 3: The websites that Brazilain buy most for clothing. [Primary research, own diagram].

Fig 4: Marslow’s hiereachy of needs. [Own diagram] Fig 5: Statista, 2014. The numbers of Internet users in Brazil. Statista. Available at: http://www.statista.com/statistics/255208/number-of-internet-users-in-brazil/ [Accessed 06 December].

Fig 6: Statista, 2014. The numbers of Internet users in World. Statista. Available at: http://www.internetlivestats.com/internet-users/ [Accessed on 06 December].

Fig 7: Statista, 2014. The numbers of social network users in Brazil. Available at: http://www.statista.com/statistics/278408/number-of-social-network-users-in-brazil/ [Accessed on 06 December].

Fig 8: People from different regions. [Primary research, own diagram] Fig 9: North region. [Primary research, own diagram].

Fig 10: Middle region. [Primary research, own diagram].

Fig 11: South region. [Primary research, own diagram].

Fig 12: What clothes you buy most online. [Primary research, own diagram].

Fig 13: Handford, A 2014. Fashion curve diagram. Lecture notes at Nottingham trent University.

All image: ASOS.com. 2014. images. Available at: http://www.asos.com/?hrd=1 [Accessed 22 December],

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BOF, 2010. Inside Brazil’s Booming Fashion Industry [online] Business of Fashion. Available at: http://www.businessoffashion.com/2010/08/inside-brazils-booming-fashion-industry.html [Accessed 4 December 2014].

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Financial times, 2013. Brazil’s installment culture spurs indebtedness [online]. Financialtimes.com.

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Appendix

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Appendix 1 PESTEL Political: UKTI’s e-Exporting Programme has been set up for supporting UK companies to sell their products overseas. The rise of technology changes consumers’ spending behaviour and Britain is the one of leading e-commerce countries with over £91 billion a year so that to meet the new demands on E-commerce, UK government commits to get more opportunities for UK businesses trading online overseas to reach £1 trillion by 2020. UKTI first helped the British companies ASOS, Jumeii and Tmall to launch their e-marketplace in china in 2013 (GOV.UK, 2014).

In order to control foreign companies, Brazil government has indirect taxes and duty policies. The most important indirect tax is import duty with 35% (Deloitte, 2011).

Economical ASOS is one of the most important stocks in AIM (Alternative Investment Market).

AIM is a stage for small firms raising money from investors. ASOS is one of the successful firms that started from AIM in 2000. Nowadays, ASOS is worth more than £3.9 billions (Hamilton, 2013).

Recently, ASOS warned by its profit drop third times in seven months, the stock value drop down at 2,207p in September. It causes concern for investors (Flanagan, 2014).

However, ASOS is better than analysts’ expectation. ASOS was warned that its profit will continue remaining the same as last year because the heavily investments within china and other international markets. As these investments will cause shortterm profit impact. (Hargreaves, 2014). But the study indicates that investors still have confidence in ASOS, over long-term investments should pay off like ASOS promised (Mindfulmoney, 2014).

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Social Today, social media surrounds people and social media is driving a new type of social interaction, conversation and trading. Social media allows users to exchange ideas, participate in events and communicate borderless (ITU NEWS, 2010).

Social media has become an important stage for cross-cultural communication to reach global communities more and more practicable. Global social media helps international brands gain cultural awareness and reduce cultural differences so that brands can reach different countries (insight, 2013).

Technology Smart mobile device is on the growth all over the world. Technology and service that are provided by mobile changes consumers’ activities. It drives consumers spending more and more time online. Smartphone stimulates consumers using social media more constantly, which causes “always on� culture presence (GOV.UK, 2014).

Over 80% of internet users have online shopping experience (Mintel, 2014).

Platforms changes e-commerce to m-commerce.

In addition to traditional online shopping on the computer, now Brazilian consumers start using mobile phones and tablet to make purchase. Research suggests that 27% of mobile devices and 38% of tablet devices have been used to make purchase in Brazil. The m-commerce has doubled its sales from 2012 and 2013 (TechinBrazil, 2013).

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Legal The growth of labor costs could affect profitability for companies. In 1999 the UK government introduced the national minimum labor wages policy. Since then labor wages have been rising every year in the UK, from ÂŁ3.60 per hour in 1999 to ÂŁ6.50 per hour in 2014 (marketline, 2014).

- Environment The fast fashion and just-in-time production currently dominate the fashion industry and lead the fashion trends. This in order has stimulated impact for consumers to buy more than they need which could causes overconsumption. Over the last few years, fashion industry has realized that fast fashion could harm the environment and raise the ethical problems (Pookulangara and Shephard, 2013).

Over the past decade, fashion industry including companies and consumers are aware of that fast fashion could bring more problems than they expected. However, it is difficult for fashion industry to be sustainable, eco-fashion and slow fashion because the high profits that fast fashion brings to companies and consumers are still chasing high fashion items and inexpensive fashion (Pookulangara and Shephard, 2013).

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Appendix 2 SWOT Strength ASOS talks to its customers like friends, spurring engagement with the brand on social media. Different from many competitors, ASOS usually posts irrelevant product contents on social media but still preserves its voice and brand culture with customers (WGSN, 2013).

Keeping up a common line across different contents are clearly social issues that carry information over between social profiles and platforms but also create a useful channel to have a conversation with customers (WGSN, 2013).

ASOS associated with reality technology company Aurasma to its well like magazine shoppable technology. Aurasma provided scan-to-shop App that allows customers scan the magazine’s page to shop from ASOS mobile website (WGSN, 2013).

ASOS launched magazine App on iOS in March 2014. The App conveys the magazine’s contents straight away to customers’ iPhone and iPad (Mintel, 2014).

Weakness ASOS cannot offer tangibility to customers in the first place. Unlike in-store shopping, Customers are unable to touch, see and try on the real products before they order (Mintel, 2014).

Complex return processes could have potential put off customers (Mintel, 2014).

The Return rates are between 20% to 40% for online retailers and ASOS has to cover the delivery and return fee at the same time (Econsultancy.com, 2014).

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Opportunity Expansion to emerging market such as Brazil. The study shows that Brazil is the most attractive emerging market because its large annual amount clothing sales, clothing sales per capita which reaches to $490 dollars per capita and the extremely young population. Brazilian population shows that more than 60% of people are below 39 years old (AKTEARNEY, 2009).

Apply new technology into ASOS system. Virtual sizing technology is becoming more merged into the online shopping experience. For example, Fits.me started its FitAdvior technology guide to retailers that are unable to give measurements of sample garments for customers. As results, virtual sizing technology has evidenced that can reduce return rate and many retailers introduce operation on their website (WGSN, 2013).

Threat The route of online shopping has become mature internationally. Thus ASOS is facing incredibly tougher competition from other international retailers such as H&M, Zalando, Topshop and Primark etc. International brands are expanding their business online (Russell, 2014).

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Questionnaire Brazil’s Fashion consumer behavior Questionnaire Thank you for participating my research.

I am a student from Nottingham trent university, and the purpose of my research is about expansion marketing strategy of ASOS in Brazil. All the result will be anonymous and will be used for academic purposes.

1. What is your gender? □ Male □ Female 2. What is your age? □ 16 - 20 □ 21 - 25 □ 26 - 30 □ 30 + 3. Where do you live in Brazil?

4. Do you follow fashion trends? □ Yes □ No 5. Where do you follow fashion information? □ □ □ □ □ □

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Blogger Magazine Internet/social media TV program Celebrity Never

6. Have you shopped online for clothing? □ Yes □ No 7. What kind of clothing you buy most from online? □ Fashionable clothes □ Beachwear □ Casualwear □ Working wear 8. Which website do you buy clothes most? □ MercadoLibre □ e-closet □ Amazon □ Others ______________

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