Asos lost its position on Britain’s FTSE 250 stock index this week, with the online retailer now valued at £320 million after previously reaching a valuation of over £5 billion, the Guardian reported.
The company and its rival Boohoo saw sales surge when lockdowns kept customers at home in 2020 and 2021. Management teams at both firms purchased large inventories, as they believed digital shopping would remain the dominant channel.
When stores reopened, customers went back to trying on clothes in person. Asos found itself stuck with a billion pounds of merchandise that it couldn’t sell.
Today, Shein serves one in three British women aged 16 to 24. The Chinese company outperforms its competitors in both price and speed to market with new styles.
This shift occurs as awareness grows about fast fashion’s environmental costs. The industry churns out disposable clothing that fills methane-spewing landfills within months of purchase. Each wash cycle sends microplastics from synthetic materials into waterways. Production depends on workers suffering poor conditions in facilities that pollute water sources and release carbon into the air.
Buyers also lose in this equation, as flimsy construction means clothes fall apart and often need replacement.
Secondhand platforms such as Vinted have won over young customers who want unusual pieces and want to earn cash by selling their own items. The environmental angle adds appeal for sustainability-minded shoppers.
Meanwhile, Boohoo has changed its corporate name to Debenhams and abandoned its youth-oriented approach. The brand has switched its focus to middle-aged consumers through an online department store model.
Market researcher Tamara Sender Ceron explained the competitive pressure.
“The growth of Shein and Temu is a huge factor [in Asos’ sales decline],” she told the Guardian. “It is particularly successful among younger shoppers. It is also a threat to other fashion retailers such as Primark and H&M because of its ultra-low price model that nobody can compete with. It’s changed the market.”
Shoppers increasingly choose resale platforms and consider environmental costs when buying clothes. These changes point to a growing demand for durable items and smaller environmental footprints.
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