Can The Chinese Market Take Up The Revolution Of Fashion Business?

Recently stroll around

There was a new discovery in the Farfetch of e-commerce website: in the past, we entered the website commodity page and jumped out of the supply shop information after selecting the size of the goods.

"Before I picked up a size and recognized the price, I always used to look at the picture and address of the buyer's shop."

She is an old customer of Farfetch. She studied almost every one or two weeks when she studied in England three or four years ago.

After returning home, I have to go up to see one or two at least once a month.

"Farfetch was originally an online collection platform for buyers all over the world, isn't it?" she wondered.

Xie Hao also found some other clues.

The most direct thing is that Farfech's website description in search engine has become "The World" s Greatest Selection of Luxury Designer Fashion, and the corresponding Chinese is "global diversified fashion boutique shopping platform".

Prior to that, the website used the slogan "300 Boutique, 1 Address (300 buyer shops, one store address") to publicize slogans, highlighting the characteristics of its global buyer shop e-commerce platform.

Farfetch UK headquarters office confirmed this fashion to interface news.

The website has been changing recently. Simply speaking, it is based on the past buying shop platform.

Direct sales cooperation.

At present, there have been direct cooperation with Farfetch, such as J.W. Anderson and La Perla.

"We now use the direct cooperation with the brand as a supplement to provide customers with more diversified brand and product choices."

However, Farfetch also stressed that "there is no change in the strategy of cooperation with the buyer shop, and the buyer shop platform will remain the core of Farfetch business, and it will always be the case."

According to the world clothing and shoe net, the website has maintained long-term cooperation with more than 500 independent buyer shops such as London Browns, Paris L 'Eclaireur, Losangeles H.Lorenzo, New York Kirna Zabete, Milan Excelsior and so on. It has also established direct links with 150 brands including La Perla, Derek Lam, Derek, Eclaireur, etc.

When Farfetch was founded in 2008, the global financial crisis was spreading.

By working with the buyer shop, Farfetch can make money in every trade commission, without having to stock its own stock, which greatly reduces the pressure and risk of capital.

Like the traditional boutiques such as Lane Crawford, and the collection platform of online and offline businesses like Taobao, it is the two most common mode of fashion business. The former representative websites are Net-a-Porter in Britain and SSENSE in Canada, while the latter are adopted by Farfetch and another British company Lyst.

Their common points were established after 2000. With the frequent use of the Internet to buy clothes, shoes and hats, and the openness of high-end fashion brands to the Internet, competition among these fashion businesses has become increasingly fierce. Every business provider hopes to find the advantage of throwing away competitors.

"The most competitive products are our competitive advantages."

Farfetch China General Manager Yang Ming told the interface news.

Before working on Farfetch in June, Yang Ming worked in Amazon China and best buy.

According to a report published by KPMG, an accounting firm, "China's online shoppers 2016: a China's Connected Consumers 2016: A Mobile Evolution" report, Chinese consumers attach great importance to the richness of online shopping platforms, and even regard this as one of the top five reasons for choosing online shopping rather than offline store consumption.

"You can imagine that today's consumers, especially the younger generation who buy fashion products, usually pursue individuality and uniqueness. They seek personalized products and brands, so the selection of products is very important, which is the value of our platform."

Yang Ming added.

Many shoppers do not know that in addition to the public oriented business, Farfetch also has a website designed specifically for the brand.

Although the two businesses are parallel to each other, they do not interfere with each other, but the website design business makes it easier for Farfetch to cooperate with some brands on platform entry and direct supply, which provides assistance for the pformation of e-commerce business from "buyer shop platform" to "diversified boutique platform".

However, it is hard to say that such a change can really make Farfetch move forward in the next market competition, because this is likely to reduce its brand recognition.

"Some consumers may notice the change of our positioning, but there are still a large number of consumers who will not feel at all. They will pay more attention to the front end of the merchandise, and will be more concerned about the product itself, not the buyer's shop, or whether it is directly from the brand."

Yang Ming disagreed with the weakening of recognition.

Luca Solca, general manager of the global luxury department of Paris bank, France, does not believe that Farfetch's move will weaken its competitiveness.

On the contrary, he expressed his approval of Farfetch for interface news.

He believes that this electronic business platform has gone out of the "very wise step" to enable it to compete with YNAP, the most powerful electricity supplier.

YNAP was a new electricity supplier merged by Italy electric business Yoox and Net-a-Porter in March 2015.

Before the merger, Net-a-Porter was famous for its content marketing, and it has been online since 2000. This time was eight years earlier than the time when Farfetch was founded. It accumulated rich brand resources and strong consumer base. It was already the most competitive fashion supplier in the market. Before Yoox had experienced the development of Bottega Veneta and Saint Laurent Paris, the technology was leading in the industry and closely related to the brand.

After the strong alliance, the world's largest fashion business provider was born.

And this scale is growing at an alarming rate.

The third quarter earnings report released on YNAP11 9 showed that its net revenue grew 19% to 435 million euros, or 3 billion 150 million yuan.

According to the company's plan, by 2020, its annual sales growth rate will remain between 17%-20%.

"YNAP still enjoys a strong first hand advantage and has a comfortable competitive position," Luca Solca said. "But in fact, the competition in the whole market is becoming more and more intense."

From the report of Paris bank, "online shopping experience ranking: from Milan to New York", the intensity of competition is becoming more extensive and complex.

In this report, Farfetch, YNAP, a specialized fashion business, is compared with the offline department stores and the brand's own network sales channels. This is exactly a comparison scenario when consumers choose shopping places.

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Against this background, the Chinese market has naturally become a topic that can not be turned around.

The annual financial profile of the luxury and cosmetics industry was released in December by the Ernst & Young China accounting firm. According to the state, China is still the largest consumer country, accounting for 1/3 of the global consumer market.

But establishing brand awareness in China requires huge investment.

Farfetch entered China in 2014, sponsoring the fashion week in Shanghai, and then setting up an office in Shanghai in 2015.

But two years apart, it built a Sinicization version of the website, and launched discounts at eleven double hours.

Last year, Farfetch also experienced a drastic change in personnel in China. Public relations and marketing activities had been greatly reduced. It took nearly a year to rebuild the team.

Farfetch's competitors did not stop.

Net-a-Porter has continued to play a fast delivery advantage in Hongkong's warehouse, and Selfridges has launched Alipay settlement function.

Although the pace of Farfetch attacking the Chinese market in the past two years is not fast enough, according to the world clothing and shoe net, in 2015, the Chinese market made a 12% contribution to Farfetch's annual revenue of about 500 million US dollars (about 3 billion 289 million yuan).

"China has always been the focus of our company's development. This year is clearer and clearer. In the next three years, Farfetch will focus on developing this market."

Yang Ming received the task from headquarters, "the first task is to let more Chinese consumers know the existence of Farfetch and know that buying fashionable products can go to Farfetch."

According to the world clothing and shoe net, Farfetch concluded that the main consumers in China are mainly fashion industry practitioners and younger generation consumers who have overseas study or living background, while the "middle class with purchasing power and buying demand" is only the "target audience" in the book.

In order to catch the wider group, she is leading the team to try to make the content of the website content adjusted, and plans to make the "foreign website" more grounded by self running micro mall.

Although there are no more details to be announced, she said Farfetch China is considering combining its own model with some local fashion business practices, such as they will not rule out the possibility of asking local stars to be spokesmen.

But more crucial is localization of experience.

Farfetch buying shop cooperation mode often causes consumers' confusion in China.

First of all, the size units of different countries are different. A buyer's shop in Italy and a buyer's shop in the United States may use two sets of size standards. In addition, due to the discount of the same goods and the different regional tariffs, the price disagreements of the shops are also frequent.

This shopping experience of different prices does not conform to the perception of most Chinese consumers, nor is it easy to explain clearly. It is one of the problems that Farfetch encountered when developing the Chinese market.

"My second task is to enable Chinese consumers to have a good experience on Farfetch and let them want to come next time," Yang Ming said. "My past work experience in Amazon helped me a lot. I learned the importance of user experience."

But she had no experience in the fashion industry, and decided that relying on her alone would not solve all problems.

Because Amazon and Farfetch are both platform based electricity providers, inventory management and supply chain operation are similar concepts, but there are still many differences in many aspects.

The most obvious thing is that Amazon sells standard goods and faces the mass consumer market, and the unit price of goods is low. In the face of a more niche market, Farfetch sells fashionable goods that are non-standard goods with higher unit price.

This means that managers need to adopt completely different management methods from market promotion to business expansion.

In addition, Amazon strives for the same price between China and the United States, but Farfetch has different price differentially for the same commodity based on tariff differences between different countries in Farfetch.

For example, the 3.1 Philip Lim sequins embroidery knitted sweater sold in the same store, the Farfetch tariff in China Farfetch is $484.85, while the US area sells for $375.

This leads to a competition between websites in different regions of the Farfetch itself.

"This needs to see what kind of demand the consumer has. Our biggest advantage is the whole process of worry free services." Yang explains, "first we guarantee the authenticity of the goods, and consumers do not have to worry about customs clearance. Generally, goods can be received on the 3-5 day of the world, and when the goods are returned, tariffs can also be returned, which is the most convenient and convenient for consumers."

But fashion consumers in China are very young and relatively sensitive to prices.

In a sense, Farfetch also needs to compete with the main suppliers of goods at home and abroad.

According to the data released by the Ministry of Commerce in May 2016, the number of domestic sea scouring platforms has exceeded 5000 in that month.

The problems that need to be faced are also the past of China's electricity supplier bonus period.

According to the "2017 Beijing commercial market report" issued by ruitder, a commercial real estate consultancy, the growth rate of China's e-commerce market has slowed sharply in 2013 and the dividend period is over.

In recent years, e-commerce platform has begun to try to infiltrate offline business entities.

For this time point Farfetch who wants to work in the Chinese market, it is also important to explore opportunities online and interact with online platforms.

In fact, this is what Farfetch wants to find answers globally.

According to the world clothing and shoe net, Farfetch will launch a plan called "Store of the Future (future store") in 2017 to explore the future mode of fashion merchandising, including how to make online and offline interaction.

Yang Ming further revealed that as part of the plan, Farfetch will hold a global luxury brand summit called "FarfetchOS" in London, England in April 12, 2017, when there will be more than 200 fashion retailers attending the event.

More interesting reports, please pay attention to the world clothing shoes and hats net.