British online retailer Asos.com has announced plans to discontinue its local operations in China, with the aim of reducing its operational costs in the region.
“We will continue to do business in China. We are simply serving our growing customer base there in a more efficient, less costly manner,” said Nick Beighton, chief executive officer at Asos.
The company said the Chinese government has recently introduced plans to increase the speed of order processing. This will allow Asos to continue their activities in the Chinese market without affecting deliveries and the services on offer.
“This should enable Asos to deliver a similar level of service from its dotcom site without having a physical presence in China,” a company spokesman said.
In addition, the e-tailer’s local site in China only offers a tight range of 6,000 pieces — the full range was edited down so that it could be stored in the company’s Shanghai warehouse. Going forward, customers will have access to the full Asos range, which includes more than 80,000 units.
The decision will also result in one-off closure costs of 10 million pounds or $14 million at current exchange. Operating losses linked to the closure are estimated to reach 4 million pounds or $5.6 million pounds in the current fiscal year.