But what sets the online fashion retailer so far apart from its small cap peers that it wouldn’t look out of place among the blue-chips on the FTSE 100?
To oversimplify any success story, you need two things: to be good and to be lucky.
First mover advantage
If we start with the latter, Asos got into the booming world of online fashion before it was really a thing.
Sure, that was definitely an astute move by management, but even they would have a hard time believing 20 years ago that online shopping would be as big as it today.
Back in 2000 when it was founded by Nick Robertson and Quentin Griffiths, it probably made more sense to open a bricks-and-mortar shop, given that the internet was still in its relative infancy and the high street was going strong.
Thankfully they didn’t do that, as evidenced by the changing fortunes of the high street and online retailers over the past couple of years.
There are a couple of reasons why the online lot, ASOS included, have been growing rapidly and at the expense of their more traditional rivals.
Shift to online shopping
First and foremost is cost: it’s a heck of a lot more expensive to manage a national portfolio of hundreds of stores – paying rent, taxes, energy bills – than it is running a main headquarters and a handful of out-of-town factories.
Then there’s the changing attitudes of British shoppers. According to recent research by the UK Cards Association, we each spend around £4,600 online every year – more than any other nation in the world.
Even the traditional bricks-and-mortar bunch are trying to get in on the rush to online by taking money out of their stores and ploughing it into their websites and apps.
Six years head start on Boohoo
Customers are key to the success of any retail business and the fact ASOS was one of the first players in this industry means it has had longer than most to build its customer base.
Implying that ASOS only attracted shoppers because of its first-mover advantage would be doing the company a disservice, though. One thing most commentators and analysts will point out is that the company is able to bring in and retain customers because of its top-class offering.
Investment in its service
The website is well-designed and easy to navigate, as is the app, using which you can order and pay for something in as few as three taps of your finger (assuming you’ve got Apple pay set up).
The delivery options also set it apart. Users can pay an annual fee of £9.95 and get unlimited next-day deliveries when you place your order before 11pm.
One of the major concerns with online shopping is the hassle of returning products, an issue which ASOS has sought to address.
The bags the clothes come in can easily be taped back up, while a pre-printed sticker comes with every order. All customers have to do is tick which item they’re sending back and why (even if that reason is ‘I didn’t like it’), slap the sticker on the package and drop it off at the Post Office - free of charge, of course.
40,000 products stocked
What really sets ASOS apart though is the clothes, shoes and accessories that it has on its site, each of them meticulously photographed.
ASOS carries around 40,000 different products on its site at any one time – an inventory that is nigh-on impossible for a high street shop to have.
Some of those products will be ‘own-brand’, but one of the major attractions to ASOS is that you have most of the big designers in one place. Tommy Hilfiger, FCUK, Diesel, Levi’s – they’re all there.
Students can always get discounts on all of those products as well, sometimes as much as 20% on top of sale prices.
That links to the next point: ASOS has nailed its audience – tweenies (that’s teenagers and those in their twenties) – who happen to be some of the most loose with their cash.
ASOS’ presence on social media, its regular tie-ups with student discount cards (NUS, UNiDAYS etc) and its trendy clothes make it a favourite for millennials.
From a more business point of view, some of you might be surprised that ASOS wasn’t snapped up in its younger days.
Under the radar
One of the reasons for that is because it has stayed on AIM, where it has gone somewhat under the radar.
Had it moved on to the main market or even up to the FTSE 350, there’s a good chance that it would’ve been spotted and taken out. How Next and co must regret not at least trying a few years ago.
Being on the junior market also keeps it out of the hands of some funds which might have looked to meddle with the company’s strategy.
Privately-held Danish clothing company Bestseller is the top shareholder, while Nick Robertson, the founder, is still the company’s fourth-largest shareholder with a 6% stake.