During Sotheby’s and Jing Daily’s “The Future of Luxury: E-commerce in Asia” conference in Hong Kong, on March 29, Judy Liu, Managing Director of Farfetch Greater China, who spoke on the same panel with Sotheby’s chief marketing officer David Goodman, both emphasized the importance of next-generation digital technologies, such as artificial intelligence (AI) and 5G, in shaping the future of luxury e-commerce. This consensus, between a 11-year-old fashion tech firm and a 275-year-old traditional auction house, is major indicator to where the global luxury industry is heading.
For a long period of time, luxury brands have been a digital laggard, known for being slow in adapting to the digitalization trends or even resisting them. That conservative mindset is constantly being challenged by the arrival of tech-savvy Millennials and Gen-Z customers.
Industry players like Farfetch, with an original tech DNA, can help bridge the gap. Right after the conference, Jing Daily caught up with Liu to further understand how Farfetch is utilizing the latest technologies to embrace omnichannel retail, and how the company’s technological development is set to benefit luxury brands and consumers.
Today, Farfetch is not e-commerce only or marketplace-only. Farfetch is a brand partner, a platform that provides solutions to all sorts of luxury fashion brands.
How will Farfetch embrace omnichannel retailing?
Farfetch’s business model is not purely online. We sell goods from offline to online and vice versa. Today, Farfetch is not e-commerce only or marketplace-only. Farfetch is a brand partner, a platform that provides solutions to all sorts of luxury fashion brands. Omnichannel retail, or what we can smart retail, is an important pillar for us to become a good solution provider to brands. For example, we have a division called “Store of the Future,” which will help Chanel unveil its first-ever augmented physical store in Paris very soon.
Will you bring these initiatives to China?
Absolutely. They will come to China in the future for sure. But our current priority in the region is to empower our brands and partners and attract more Chinese users to the site. At the same time, we are certainly investing in omnichannel, smart retail. You know what is interesting is that our China-based technology team is closely involved in developing smart retail solutions, as China’s new retail development is rapid. Consequently, Farfetch will definitely collaborate with brands to test smart retail in China some day.
How do you see 5G and AI disrupt your business in China?
5G networks have not been officially released in China yet, but I think China will be the country that is capable of fully utilizing it in a lot of commercial opportunities. The technology will help e-commerce companies improve customer experience significantly.
In terms of AI, there are various ways of applications in our industry. What Farfetch is focusing on for now is two-fold: visual and audio. Last year, we launched a visual search on our site. Visual search is really common in China’s e-commerce platforms. Audio chatbots are also widely used for the customer service team of e-commerce in China. We hope our brands and partners can benefit from our technologies in the near future.
Facing the influx of rivals into the Chinese market, what is Farfetch’s unique selling point?
Farfetch’s cross-border business model is that we take commissions from brands but we don’t stock inventory and sell. This model allows us to be able to provide Chinese consumers with the latest and fullest products from more than 3,000 brands and 1,000 partners around the world.
Secondly, Farfetch’s investment in China is leading the industry. We have opened offices in Beijing, Hong Kong, and Shanghai. A great deal of hires is dedicated to enhancing our product and technology. For example, our Shanghai office has over 200 employees and half of them is working on product and technology. With this investment, we are able to offer a much more localized service and optimize our product for Chinese customers, compared to our rivals.
The interview was edited and condensed.