Will Jingdong'S Shareholding Farfetch Hit The Market And Trigger Fashion Companies To Follow Suit?

Luxury electric business in UK

A listing application was submitted to the NYSE and the target raised $100 million. It plans to land A shares by the end of the year.

In the past two years, Farfetch has not made clear the intention of listing, but based on its rapid development strength, rumors about listing are endless.

At the beginning of this year, the Financial Times reported that Farfetch had hired Morgan chase and Goldman's bankers to make preparations for the listing, valued at $6 billion.

Today, rumors are true, and Credit Suisse Securities, Deutsche Bank Securities and France Paris bank securities company will also participate in its listing process.

At present, Farfetch does not disclose information about stock price and number of shares issued.

Farfetch

In a statement, the luxury industry has maintained a compound growth rate of 6% over the past 20 years. If the industry continues to develop at such a rate in the next ten years, the value of the industry is expected to exceed 450 billion dollars.

Therefore, Farfetch has a good opportunity for development.

"By then, sales of online channels will account for 25% of the total sales volume. Today, the situation of 75% sales in physical stores will be completely changed by digital technology," Neves said. "In fact, the boundaries between online and offline will also disappear, which is exactly what Farfetch is doing in" full channel retailing ".

Neves was founded in London in 2008.

And develop rapidly with the light asset business model. By working with buyer shops, the Commission will earn 25% of the Commission on each paction.

Compared with other luxury goods providers, light assets do not need their own stocks, which greatly reduces the pressure and risks of capital.

The premium of Farfetch will be higher than that of traditional retailers such as eBay and Amazon.

Farfetch platform is composed of three parts: application, service and data. Technology is the core of Farfetch, so Neves regards Farfetch as a technology company rather than a fashion company.

John Veichmanis, chief marketing officer of Farfetch, has said that about 900 engineers in Farfetch specialize in technology research and development. Every day, new technologies are born: "we invest most in marketing technology, about $4 million.

1/4 of the team are data scientists, using our data to locate target customers and predict their preferences and buying behaviors.

With these, we know how to tell a story to consumers.

Under such a development mode,

As the fastest growing retailer in the UK, it has defeated 200 rivals worth over 2 billion 500 million yuan in 20 countries and regions around the world.

In 2016, Farfetch realized a revenue growth rate of up to 70% with a profit of 268 million. It exceeded JD Sports, Asos and Superdry brands.

In a relatively short period of time to catch up with another luxury electric giant YNAP, the latter eight years earlier than Farfetch, 2017 of total revenue of 2 billion 100 million euros, an increase of only 16.9%.

More and more investors have been selling olive branches to Farfetch. The brightest investors in the past two years are Jingdong and Chanel.

In June 2017, Jingdong invested $397 million in Farfetch, which is also the largest overseas investment by Jingdong. Liu Qiang Dong joined the board of directors of Farfetch.

From then on, Farfetch obtained the logistics, finance, technology and social media resources of Jingdong.

In February of this year, Chanel announced the acquisition of a minority stake in Farfetch.

This deal can better reflect the value of the fashion business in the investment sector, because Chanel is unwilling to enter the electricity supplier, but is willing to borrow the digital means of the electricity supplier to get the heart of the millennial generation.

At present, Farfetch also has Kangtai Nash group, Index Ventures, Carmen Busquets and other investors.

It can be expected that if the listing is successful, the investment circle will be more interested in the fashion industry, and will also encourage other fashion technology companies like StitchFix and Spring to seek listing.