Back in November, Farfetch reported that its revenue grew an absolutely insane 74 percent over the course of 2016. This was notable for several reasons, not least of which was that this percentage did not yet reflect several of the luxury e-tailer's more sizable moves, like hiring Net-a-Porter founder Natalie Massenet, linking up with Condé Nast to both buy and shutter Style.com, tapping street style doyenne Yasmin Sewell to serve as Vice President of Style and Creative and lastly, securing a $397 million mega-investment from Chinese e-commerce giant JD.com to expand into China. So, yes, Farfetch is going places — including Asia — and quickly.
Looking shortly ahead, that will also include the Middle East. On Wednesday, Farfetch announced a partnership with Chalhoub Group, one of the region's largest luxury distributors, on a joint venture that would both connect's Chalhoub Group's Middle Eastern-specific retail, distribution and marketing expertise with Farfetch's own e-commerce, technology and logistics.
Business jargon aside, what, exactly, is Farfetch getting out of this? Well, exposure, for one: According to a press release, the e-commerce company's new relationship with Chalhoub Group will allow for the platform to reach more customers in the Middle East luxury market, in addition supporting its already-healthy consumer base in the area. With Chalhoub Group's help, Farfetch now has plans to make its Middle Eastern experience more personal, including launching an Arabic-language site in the first half of 2018, curating products that specifically target the local shopper and increasing regional supply by on-boarding Chalhoub Group's own network of stores and partner franchises. Farfetch will also grow its VIP offering, like personal shopping services, for the Middle East's ritzier customer.
"As one of the largest luxury markets in the world, the Middle East is of great strategic importance to Farfetch," said Farfetch's founder and CEO José Neves in a statement. "Our joint venture with Chalhoub Group represents our commitment to being thoughtful and thorough with regards to our expansion efforts in the region, which is an opportunity for our business and the brands and boutiques we work with around the world. It's also great for our customers, bringing lovers of luxury fashion in the Middle East and beyond even greater choice, and incredible products that they can't find anywhere else from around the world."
The luxury e-commerce marketplace has had its eye on Middle East and the area's customer base for quite some time, with Farfetch competitor Yoox Net-a-Porter Group opening up an office and distribution center in Dubai at the end of last year. The region is known for both its strong growth potential and high spending power, and it's certainly in the luxury market's best interest to approach the Middle East in a considerate manner that accommodates local consumers, as it appears Farfetch is doing here with Chalhoub Group.
Farfetch's Middle Eastern play comes on the heels of reports that the company is preparing to IPO in New York in September 2018 at a valuation greater than $5 billion, a source "close to the deal" told Business of Fashion.