Asos reports strong start to life in Russia

UK fashion e-tailer Asos said today (19 September) that sales in its newest territory Russia gained momentum in the three months to 31 August.

The burgeoning British business said in a trading update that international retail sales now represent 63% of total sales with international revenues jumping 47% year-on-year in the company's fourth quarter. It comes after Asos launched a site in Russia on 1 May.

Planet Retail research director Malcolm Pinkerton recently told Essential Retail that Russia is a key area of focus for companies currently operating in mature eCommerce markets. He said that 47% of Russia's online shoppers consider it important that they can transact in their own language and currency, which Pinkerton argued was a key indication of demand for cross-border eCommerce.

"Those tailoring their strategies according to the readiness of the market and sophistication of the online shopper are more likely to realise the full potential of cross-border eCommerce," he explained.

Asos operates seven other local language websites in total – in the UK, the US, France, Germany, Spain, Italy and Australia – and it was the European arm which drove international sales in the final quarter. It has recently started planning its entry into China, too, as the company's stated aim to be a "truly global retailer" continues to hold strength.

Group retail sales for the full 12-month trading period were up 40% year on year to £754 million, with UK sales up 34% and international sales rising 44%. Sales for its fourth quarter reached £208 million.

Nick Robertson, Asos CEO, commented: "We have now annualised last year's price investments and retail gross margin for the quarter grew by c.460bps year on year.

"This strong gross margin position has allowed us to continue to invest in the overall customer offer, attracting more active customers which now stand at 7.1 million."

Profit before tax for the year is now expected to be marginally above expectations.