Farfetch’s partnership with equally giant online platforms foresees thrilling changes for the future of luxury retail and online experience.
The past few months witnessed a dramatic change in the retail experience as consumers started turning to the digital space for its safety and convenience. Although brands have started securing their respective e-commerce platforms, the speed at which it was executed accelerated with the global pandemic. Luxury e-commerce platform Farfetch is among the pioneers of such a movement. Now that there is a good opportunity to penetrate into other markets, Farfetch closes a $1.15 billion deal with tech giant Alibaba and Swiss luxury goods group Richemont. This landmark partnership fuels expansion to the fast-growing luxury market in China. Together with Pinault’s investments, this China-focused joint venture envisions to become the biggest platform for luxury.
Growth at full speed
Through the billion dollar-worth deal, Farfetch aims to support every small high-end fashion brand to build their online stores in Alibaba. The Chinese tech giant owns Tmall Luxury Pavilion, Luxury Soho, and Tmall Global. These platforms have over 757 million consumers, most of which are Chinese. With a tremendous increase in reach, more luxury shoppers can access their favorite brands through the integration with Farfetch or Richemont’s Net-a-porter that launched on Tmall Luxury Pavilion last year.
Since there remains a risk of traveling abroad and even visiting public spaces, the new global platform can assist consumers to continue their shopping at home. Although these platforms carry an overwhelming variety of upmarket brands, clientele can be assured all these underwent expert curation. They can expect the exceptional quality of customer care as well, similar to physical shopping.
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Fusing tradition with contemporary
While consumers are already well-acquainted with online retail, Farfetch plans to further capitalize on this. Apart from reaching more markets, they are offering a blended experience of online and physical shopping. Although digital defines the impending future of commerce, the Farfetch venture wouldn’t completely eliminate tradition. After all, the luxury industry hasn’t fully experienced virtual space. So, by fusing both digital and physical experiences, Farfetch with Alibaba and Richemont can push the entire high fashion sector to a game-changing milestone.
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Fulfilling the new initiative
To complete the agreement, Alibaba and Richemont will invest $300 million each in Farfetch, and $250 million each in Farfetch China. They will also own 25% of the Chinese unit. 24% can be bought after three years of the venture’s formation. Pinault of Kering and Artemis joins the union as well with an investment in Farfetch worth 50 million in stock. All these investments will be fulfilled during the first half of 2021.
This giant partnership only proves digital selling has become more important than ever, and Farfetch, Alibaba, and Richemont will not be missing out on this.
