Farfetch buys CuriosityChina digital firm in focus on Chinese social commerce
today Jul 20, 2018
Farfetch is deepening its focus on China as that country heads towards being the world’s biggest luxury market and is acquiring an e-marketing firm there that specialises in leveraging social media.
CuriosityChina actually focuses on China’s top social network, WeChat (which has over 1 billon users), targeting those users to sell products. It currently works with many brands that are already Farfetch partners to help them use WeChat and reach the customers they’re after, as well as offering CRM and other services.
Farfetch's Chinese ambitions became clear last year when local giant JD.com paid almost $400 million for a stake in the London-based firm.
Farfetch plans to incorporate CuriosityChina into its own Black & White operation, which is its white-label API that lets boutiques integrate with the Farfetch purchasing and logistics platform.
The importance of this deal for the firm's Chinese ambitions is massive, as underlined by the fact that the trio of CuriosityChina co-founders will become pivotal to Farfetch’s Chinese ops. Judy Liu will be the luxury e-tailer’s managing director for the country, Alexis Bonhomme will be VP of commercial for China, and Arthur Shui will be in charge of tech there. All other employees will also be retained.
“We’ve been talking to luxury brands for years and every meeting we have they ask about China,” Giorgio Belloli, Farfetch’s chief commercial and sustainability officer, told Bloomberg. “Practically everything in China happens on WeChat.”
Terms of the purchase haven’t been released but we can assume that Farfetch has had to pay a hefty price for a firm that could potentially open up huge sales for it in the Chinese market.
The Chinese consumer is the key target for the €262 billion global luxury market with shoppers from the country accounting for around 32% of all luxe sales, whether they’re buying at home or abroad.
And social media is a major sales channel for them, more so than in many other developed luxury markets, with WeChat in pole position.
With Asia Pacific as a whole accounting for around a third of Farfetch’s sales, this latest purchase looks eminently sensible. And given the social media focus it will add to the company, it’s likely to see it tapping into a new seam of customers who are maybe not currently going directly to its website to discover its offer.
Farfetch, which is expected to file for an IPO soon valued at up to $6 billon, has made several key acquisitions in recent periods. These include buying London-based retailer Browns, as well as taking on Style.com after Condé Nast cancelled its own foray into luxury e-tail.
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