Boohoo to grow local presence

Boo hooBoohoo plans to strengthen its presence in Australia over the next 12 months, with the UK-based pureplay planning to localise its extensive online offering.

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Around 36 per cent of the online retailer’s sales are from overseas markets, with Australia ranking within the e-commerce giant’s top five markets, alongside the US, Canada, and New Zealand.

Boohoo, which targets 16 to 34 year olds, was founded by Mahmud Kamani and Carol Kane in 2006. It now the UK’s second biggest online fashion retailer, closely following rival, Asos.

It stocks women’s and men’s fashion, footwear, and accessories and adds 500 new styles to its each week.

In 2012 Boohoo launched an aggressive marketing push in Australia across social and digital channels and TV advertisements. This year it intends to create a more localised offering for Australian shoppers.

Carol Kane, Boohoo co-founder, told Inside Retail PREMIUM Boohoo’s popularity has been due to Australian consumers have a strong appetite for international fashion labels, particularly British brands.

“I think Australians have a really good appetite for international brands. Before we even started marketing here we found that we were getting sales from Australia without doing anything,” Kane said.

“I think that was largely due to the fact that Australian consumers are looking towards British brands and what’s happening in the UK in terms of our fashion and we just capitalised on the success of that.”

Boohoo’s pricepoints average A$30 to $50, which Kane says its on par with the UK.

“We don’t have a huge shift in our pricing. Our pricing is the same in the UK as Australia. We don’t have much over the A$100 mark and I think the average selling price is around $30. That could be a top, blouse, skirt, or dress – we have lots of categories that fall into that pricepoint.”

Looking ahead

Earlier this year Boohoo listed on London’s AIM market. Its value was estimated to be around £560 million (almost A$1 billion), with speculation it will use part of the funds to fuel global growth.

“We are currently selling and delivering to over 100 counties, but we’ve only really had active marketing in five or six of those. The plans for the next 12 months is to strengthen the markets that we’re in and Australia is one of those.

“We want to get bigger here, strengthen our proposition, as well as localise a lot more.”

A part of its strategy is to partner with Australian designers.

“We want to start talking to Australian designers to localise what we do and make sure that we’re capitalising on all the trends that are relevant to the Australian consumer.”

The second focus for 2014 is Europe.

“The trends that we see around the world are global trends in terms of product categories that do really well. Fashion is very international and our winning styles are the same in the UK as Australia, even with seasonality take into account. We see the same popular lines and we see them across all territories.”

Bohoo continues to extend its categories. Last year it launched menswear and most recently began a plus size and evening wear ranges. This year it will introduce a petites and tall collection.

Kane told Inside Retail PREMIUM she is unaware of the major players in the online fashion space in Australia, claiming bricks and mortar retailers are Boohoo’s biggest threat.

“I think it’s a lot smaller [online] market in Australia, but there’s really not that many European pureplays either. There’s the two pureplays – Asos and us – no matter where I go in the world Asos is a player that comes up in every single country.

“Within Australia I think we recognise more bricks and mortar retailers as our direct competition, those that are multi-channel retailers with e-commerce platforms.

“The people that seem to be above us in the online rankings in Australia seem to be the discount, flash sales websites, but I haven’t actually identified anyone that does what we do online as an Australian player.

“The [Australian] pureplays seem to be more of the flash sales. I would say that that’s who I would recognise as the e-commerce players in Australia.”

Despite Kane naming local bricks and mortar retailers as Boohoo’s biggest competition, she says there are more advantages to being a pureplay than operating as a traditional retailer.

‘“If you’re a multi-channel retailer with bricks and mortar stores and an e-commerce platform, that’s actually quite difficult to do because you focus on your bricks and mortar network number one, and then your e-commerce platform becomes a bit secondary.

“If you’re a pureplay, you don’t have the costs of a store and you don’t have the limitations of space in the store so you can constantly be topping up the offering.”

Kane says there are no disadvantages to not having a physical presence.

“Fifteen years ago I would have said that you needed a retail store, but it’s a different generation that are shopping today. It’s very natural for them [to shop online]. They use a retail environment as a social activity and do the sales online.”

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