Why Does Chanel Invest In Farfetch?

According to the world clothing and shoe net, in February, Chanel announced its investment in Farfetch, a European company.

Electricity providers are usually considered to be competitors of YOOX Net-a-Porter (YNAP).

YNAP is the world's largest luxury item.

Last year, total revenue of 2 billion 100 million euros, up 16.9% over the same period last year, is irresistible.

For this investment, the boss of Farfech is very reserved, saying that the investment of Chanel is actually very small, but it is very important.

Chanel said that investing does not mean that Chanel sells packages on Farfech, in order to improve the experience of customers in the physical shops.

They also believe that online experience is not comparable to physical shops.

A little earlier than Chanel. Burberry also announced cooperation with Farfetch. There is no concern about digital control Burberry. It means selling goods on Farfetch and talking about how to make consumers buy better online.

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Who is Farfetch? Maybe someone wants to ask.

Portuguese Jos e Neves founded the luxury business platform in 2007.

Today, their customers are sold all over the world, and there are more than 700 brands on sale.

The industry often compares Farfetch to YNAP, and Farfetch also digs out Natalie YNAP, the founder of Net-a-Porter after the merger.

It has been reported that sales in 2016 amounted to US $800 million in Farfetch.

Now you should know the position of Farfetch in the luxury electric business.

NAP founder Natalie Massenet and Farfetch founder Jos Neves Neves Financial Review

In the eyes of consumers, Farfetch is an electronic business platform. In the IT industry, people notice that Farfetch and NYAP are exploring new technologies, and want to be a IT circle Cool Company.

Farfetch has a department called "future store", developing various technologies to enhance customer's store experience, integrating online and offline world.

Farfetch also has a department that specializes in setting up its own e-commerce platform for luxury brands, such as a third party responsible for outsourcing services.

Farfetch bought a buyer's shop in London three years ago. Its functions are similar to the showroom, Farfetch's touch screen and so on.

Some leading Chinese e-commerce companies are also trying these practices.

On the purpose of investing in Farfetch, Chanel's argument refers to the exploration of the other side of the "outside the electricity supplier".

The luxury industry is concerned about how many clothes and shoes that Farfetch sells every year. Can it challenge the leadership of YNAP? The investors behind Farfetch are even more nervous. They are IDG, Kangtai's group and so on.

Last year, Jingdong invested nearly $400 million to become one of Farfetch's largest shareholders. Liu Qiangdong entered the Farfetch board.

In fact, in 2016, seven wolves voted 35 million yuan for Farferch and became a minority shareholder.

So now, Chanel and Jingdong, seven wolves also appear on the list of shareholders of Farfetch, a little magic.

But that does not explain anything. These shareholders do not have much to do with each other.

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So what does Chanel invest in Farfetch?

Bruno Pavlovsky, President of Chanel fashion department, told reporters that clarification is needed.

It is not to sell products on Farfetch, nor is it to open up its own e-commerce platform.

Farfetch founder Jos Neves and Chanel fashion department President Bruno Pavlovsky

He said that the purpose of this investment is to enrich the experience of consumers before and after going to the store.

In the last year, he made it clear that he did not do business, many times.

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The reporter estimated that the annual sales of Chanel would be about 6 billion dollars.

The president said that 2017 is the best year Chanel has ever had.

The parties try to understand the logic given by the president.

For example, when customers accumulate data on shopping habits, preferences and other data on Farfetch, if they are used by Chanel stores, customers will be able to "guess you like" before customers go to the store.

If the customer pays attention to privacy and wants to "go for a stroll", he can let the shop assistant know in advance that he will make the guest invisible and make the other party free and relaxed.

We believe that this is one of the intentions of Chanel to invest in Farfetch, but not the first.

Chanel says that they will not sell packages online, which does not mean that they are indifferent to digital media and e-commerce.

On the contrary, Chanel has appeared in the forefront of the most popular digital luxury brand, leading in digital marketing.

Chanel may not dare to take the place without Gucci, but also ran ahead of Louis Vuitton.

Chanel is not absolutely not sold online, such as perfume sold on WeChat several times.

When people begin to care, will Chanel handbags sell online? The brand denies it again and again.

The president revealed that many Chanel customers in Asia strongly object to selling online packages.

Chanel has made a balance at this point.

Stuart Lauchlan, an American IT writer with 23 years of experience, writes that Chanel is extremely sensitive to electricity providers. They worry that if they sell online, they will lose some customers.

Luxury brands have some important concept of big guests, they reject the electricity supplier.

However, today's young girls also have very good spending power. They love online shopping. When Farfetch was founded, they were still in kindergarten. Buying bags online is perfectly natural for them.

It is important to keep the old brand steady and high quality tonality and keep up with the times and not be abandoned by young people. This may be a difficult problem for every brand owner.

As we mentioned at first, sales volume has reached 2 billion 100 million euros in YNAP, and the growth rate is extremely fast. No one dares to ignore it.

Chanel finally decided to use a little investment to keep pace with the development of luxury electric business, but firmly denied that selling online can be said to be a broken brain.

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This immediately reminds us of another thing. Not long ago, the group said that as the largest shareholder of YNAP, the world's largest luxury goods supplier, they wanted to acquire the remaining shares, 100% owned.

This also explains why Chanel invested in Farfetch rather than YNAP. The latter has been controlled by the peak, and as a competitor, it is necessary to pull other children to stand in line.

Just in the past 2017, LVMH restarted its own business platform. Kai Yun group opened up official electric business for Gucci.

In the past ten years, the predators have been negligent. None of them has fully realized the power of luxury electric providers. Apart from the peak investment in Net-a-Porter, there are few other businesses.

Today they are collective to wake up, but it is obviously too late to start their own electricity supplier from scratch.

However, there are ways to get the big crocodile money to find their own satisfied business platform, invest and buy around the world.

In recent twenty or thirty years, LVMH, Li Feng and Kai Yun group bought dozens of brands of fashion, leather goods, watches and clocks and jewelry respectively.

At the moment, they seem to be satisfied with the brand mix, and the snake eats slowly.

Perhaps a brand that makes a package has little meaning to them, and acquiring a global electricity supplier is of strategic importance.

If one day, the electricity supplier becomes a climate and becomes a mainstream channel, then the brand can be sold to its own electricity supplier instead of being controlled by others.

In case their own brand wants to be an electric supplier, and the big business platform is under the control of the competitors, it will be very passive.

Luxury giants began to rush to buy electricity giant, the next day is to divide the sphere of influence stage.

There are not many luxury electric providers all over the world. Farfetch, as a competitor of YNAP, is undoubtedly an ideal goal.

Of course, there are some local luxury electric providers in different regions, such as Revolve in North America, ASOS in Europe, China and South America.

Different categories also have different roles, such as those specially selling cosmetics, specially selling watches, which are worth buying.

At the beginning of Farfetch and Net-a-Porter, they were disdained by brands, but today they have become hot stars.

In the Chinese market, the international luxury electric providers have not done much. That is to say, luxury goods groups can not achieve the layout in the Chinese market, no matter they buy Farfetch or YNAP.

Many luxury brands have begun to authorize Jingdong, Tmall and vip.com. Maybe the luxury goods group will invest in these Chinese electricity suppliers in the future.

The two sides seem to have started the game, and the situation is changing every day.

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When your business is big enough, you have to consider the safety of the channel.

LVMH has acquired 51% of DFS's shares, and has also owned silk.

Another unknown fact is that Swatch and LVMH Group invested in China's largest watch dealer Hendry long ago.

In the way of stock participation, it quietly lurks inside the channel, strengthens relations and maintains communication, so as to ensure the safety of the sales links. This is a reason for purchasing upstream raw materials factories and controlling the supply chain.

With the electricity supplier becoming an important channel for luxury sales day by day, the giants will not waste a day, and the tentacles will soon be filled with this digital space.

Among the luxury giants, there is a scramble for online sales channels.

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