Savant Talks – Farfetch brings European luxury brands to China

Farfetch is an online luxury fashion retail platform that sells products from over 700 boutiques and brands from around the world.  In 2015, Farfetch launched in China, becoming one of the fastest growing brands in the country so far. We had the pleasure to sit with Kelly Kowal, MD of Farfetch – Black & White, to ask her what European Brands can learn from eCommerce in China.

What role do you see for marketplaces in the future of eCommerce?


Well, for how ow I see it, marketplaces are there to help brands to capture customers wherever they are currently shopping. If you think about the traditional, offline type of consumer journey, customers don’t only shop in mono-brand stores or only in multi-brand stores. The two options are not mutually exclusive!
The role of the marketplace is to bring exposure to the brand or the retailer, to capture the consumer when he/she might not necessarily be thinking of  (or even know) that specific brand or retailer.

A marketplace can be useful to set your merchandising strategy as you are in charge of what you want the customer to see. This is quite different from a department store where you can sell only what you showcase.  In a marketplace you can be much more nimble and show your full collections, or focus on your hot products.

Generally, luxury brands are hesitant to sell on marketplaces as they’re afraid of brand erosion, they want to maintain an idea of exclusivity around the brand. How did Farfetch manage to change this trend?


Farfetch has been working on this for 10 years. It takes time. Time and trust. We needed to gain the trust of the brands and it was crucial for the brands to understand that we are still giving their customers a luxury experience. We are not, for example taking their brand and discounting it or creating a negative experience. We also develop this trust by providing a great shopping experience to the customers, making them feel they’re still shopping luxury even though it’s a website. Even if we don’t own Gucci’s products, we can still provide the luxury experience: from the speed of the site to the layout, the checkout experience, the purchase, the customer support. The brands need to see that we are consistently delivering on our promise to the customer. Farfetch can enhance their online offering by being another area to showcase their products to a different set of customers.

luxury brands


Farfetch is going strong in China, with offices in Shanghai and Hong Kong. What cross-learnings can you share with Western retailers about your experience with the Chinese consumer?


The key is to understand the different types of media they use and the multiple channels they like to use for shopping – the desktop is almost irrelevant and mobile and apps are the preferred shopping platforms. For example, our WeChat MiniStore is a key component for reaching the Chinese audience. On top of thatt, we have our website and our own eCommerce app, helping us to reach the target audience through multiple touchpoints.

Do you see something like WeChat happening in Europe any time soon?


Well it’s definitely a great question as a lot of people have been speculating about it in the last few years. Acquisitions and alliances between social media platforms could indeed deliver a sort of WeChat experience. I think it will get closer and closer, but I’m not sure if we would get to that sort of full WeChat ecosystem in the next 5 years. The social media landscape looks very different in the western world.

The key to unlock the full potential of messaging platforms for eCommerce is the payment method and in China you clearly see it’s what ties it all together. When you’re in the WeChat app, you’re using a payment method for many different in-apps, that’s the reason why you’re able to stay within the ecosystem. And this is what is still missing in the western world.

There’s still so much room to make the shopping experience better and easier for the customer, and that’s what WeChat does and the reason why it is so integrated in everybody’s daily routine.

Something that’s really interesting for us and for the industry is how much retail is going to change in the next 5 to 10 years and I believe there will be a huge focus on omnichannel. “Omnichannel” has been a buzzword for over 10 years now, but a true omnichannel experience, where there is a one to one relationship with the customer, both online and offline, it’s simply not there yet. Retail is becoming more and more about experience: we are going toward Augmented Retail, meaning we have to look at the full spectrum of where the customer is and offering them experiences, ideas and inspiration, real reasons to go back into the store.

What advice would you give to luxury brands from Europe who want to explore the Chinese market?


Well, the first piece of advice I’d give is: go and visit. It’s amazing how many brands have never been to China or haven’t spent enough time in the country to understand it. It’s so  so different from what we’re used to in Europe and you can only really start to understand the consumers by immersing yourself in that culture. You need to have a strong presence and a deep understanding of the market, trusting the local team and constantly trying to understand the Chinese culture and their way of doing business.

Secondly, marketing in China is very expensive. So, if you are going to do it, make sure that you really support the Marketing efforts while being aware that it’s not going to be a quick win. Consistency is crucial and the strategy needs to be long term. Make sure to allocate the right amount of resources and the right amount of budget to commit to making China work.

Third, I want to highlight the importance of understanding the Chinese consumer and considering it as a traveling consumer. When you think about the segment, don’t just think about China in China, think about where they travel. How do you give them the same experience across two continents? How do you connect your offline and online? How do you integrate your different apps together?

Make sure you’re thinking in a very holistic way.

If you would like to hear more from Kelly about Marketplaces, eCommerce in China and mobile commerce, she will join us at Savant eCommerce Amsterdam for an Inspirational Keynote – “Men are from Mars, CX is from… China?” on Day 2. On Day 1, Kelly will take part to our Profitability Think Tank Session, so make sure to secure your tickets here!

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