Farfetch: how a Western brand connects with China’s luxury shoppers

Farfetch, a British-Portuguese online luxury fashion platform, has made great strides in China after forging strategic partnerships with e-commerce giant Alibaba and global luxury group Richemont. The company also has alliances with Tencent and JD.com, benefitting from their expertise with WeChat, the Chinese messaging app.

Speaking ahead of next week’s Luxury Symposium event in Hong Kong, Alexis Bonhomme, Farfetch’s VP of commercial, China and APAC, discussed with Jing Daily the reasons for the company’s success and the challenges for the future.

Key takeaways

• Bonhomme said that China’s digital ecosystem is shaped by two main companies – Alibaba and Tencent – and Farfetch has been fortunate to get investment from both, which is rare for a Western company.
• Online luxury consumption was already significant in China before the coronavirus outbreak and it is bouncing back strongly post-COVID, with high demand for luxury goods, such as handbags and watches. Leather goods and jewellery are also strong-performing categories.
• Farfetch’s regular customers are relatively young, averaging 29-years-old in 2020, while its VIP customers are also younger than the industry average.
• An important part of Farfetch’s business in China relates to offering exclusive and premium experiences for “private clients”, including dinners and master classes as well as a dedicated WeChat official account. “When it comes to engaging with Chinese luxury consumers, personal touch and offline activations are essential,” Bonhomme said.
• In terms of challenges, he pointed to operating costs as well as the rival ‘Daigou’ cross-border exporting system. In addition, he said the cost of sales and marketing is significant in China.

Key quote

“China is the fastest-growing luxury market and also where trends and changes happen the fastest. You need to permanently adapt yourselves, rely massively on your team in the market, and leverage each opportunity. The day you stop innovating or stop being on an alert mode, you will go down” – Alexis Bonhomme, Farfetch’s VP of commercial, Greater China and APAC.

Sourced from Jing Daily