Growing number of luxury fashion brands are choosing to distribute and trade via Farfetch, an online fashion marketplace founded by Portuguese entrepreneur José Neves. Farfetch recently secured $1.1billion investment from rivals Alibaba and Richemont, the Swiss watch and jewellery group, as well as €50 million personal investment from François-Henri Pinault, the billionaire founder of luxury group Kering.
As per Financial Times, Farfetch and its new financial backers intend to expand in China, the world’s second-largest and fastest-growing luxury market. It connects consumers with brands, earning a commission of about 30 per cent on each sale, and has a sophisticated distribution system whose technology can match supply with demand.
Under a system that Neves calls ‘direct e-concessions’, brands decide what they sell on the Farfetch platform and set their own prices to avoid discounting that could damage their high-end image.
Neeves believes that the blurring of online and physical store shopping creates a big opportunity for both models of the fashion industry, especially in China.
