Several major luxury fashion brands continue to prefer selling direct to customers, but a growing number are also choosing to distribute and trade through Farfetch, an online fashion marketplace founded by Portuguese entrepreneur JosÃ© Neves.
Despite the huge impact of the pandemic on economies around the world, Farfetch recently secured a $ 1.1 billion investment from rivals Alibaba and Richemont, the Swiss watch and jewelry group, as well as an investment. staff of 50 million euros of FranÃ§ois-Henri Pinault, the billionaire founder of the luxury group Kering. .
Farfetch and its new backers plan to expand into China, the world’s second-fastest growing luxury market, according to the Financial Times after interviewing it.
Main reasons for Farfetch’s business success
- Neves’ choice of a business model differs from other online retailers, such as Net-a-Porter, in that Farfetch does not buy inventory and therefore takes less risk on fleeting trends.
- Instead, it acts as a marketplace that connects consumers to brands, earning around 30% commission on each sale, and has a sophisticated distribution system whose technology can match the offer to. Requirement.
- Under a system Neves calls “direct electronic dealerships,” brands decide what to sell on the Farfetch platform and set their own prices to avoid discounts that could harm their high-end image.
- He also believes that the confusion of shopping online and in physical stores is such a big opportunity for the fashion industry, especially in China, that there will be room for both models.
âAlibaba and Farfetch share a vision for how luxury will evolve over the next five to ten years, and we believe we can build something amazing with themâ – JosÃ© Neves, founder of Farfetch.
From the Financial Times