Headline, December 27 2020/ ''' '' E-COMMERCE -LUXURY WAR- E-CONSUMER '' '''

''' '' E-COMMERCE 



'' THE PANDEMIC HAS SHONE THE SPOTLIGHT ON ONLINE FASHION in a big way as area for growth, and a category leader will definitely emerge in the next five years,'' said Chris Morton, the founder of Lyst, the fashion search platform whose-

Whose sales have grown ''in the triple digits'' since the start of the year. ''This is the fight to the top we are running.''

Scott Galloway, a professor of marketing at New York University's Stern School of Business, agreed. ''A supreme luxury e-commerce group is a compelling idea, but no one so far has been able to pull it off.

For the last decade, the Western luxury e-commerce landscape has been largely dominated by Farfetch - an inventory free marketplace platform founded by Jose Neves in 2007.

FARFETCH - which went public in 2018, has a business model that includes an e-commerce marketplace for brick-and-mortar boutiques, and it works directly with brands on their back-end technology and logistics.

This month, the company reported a record quarter. The value of goods sold reached $798 million in the three months ending September 30, a 62 percent increase from the same period a year earlier. Gross profit was up 82 percent, edging the 13-year-old company toward profitability in 2021.

Mr. Neves of Farfetch acknowledges that Amazon is his leading competitor in the race for luxury e-commerce supremacy, so it makes sense that he would team up with its greatest rival, Alibaba.

The new Richmont-Alibaba investment in Farfetch underscores how Alibaba has been able to circumvent some of the issues that luxury brands have with Amazon.

Its Tmall Luxury Pavilion has successfully lured almost 200 high-end names onto its site by promising a highly burnished and controlled customer experience and clampdown on counterfeit products.

It also comes after pandemic restrictions on international travel which means that Chinese consumers - the consulting firm McKinsey Company predicts they will account for $178 billion in luxury spending by 2025 - who used to splurge on luxury purchases abroad are now buying them at home.

Ali and Richmont will put $300 million each into Farfetch itself and another $250 million each into a new joint venture called Farfetch China. They will own 25 percent of the Chinese entity and have an option to buy another 24 percent in about three years.

''I think this deal transcends competitors' offerings : You are either a disrupter or you are a disrupted, and I hate being the latter,'' Mr. Rupert said. ''Being an owner of brands, this could have all dragged on, but we see this deal as an acceptance of a new way to retail.

Richemont is in a somewhat unorthodox position in that it also owns Yoox Net-a-Porter, once deemed Farfetch's biggest rival. Its online business continues to operate at a loss, and Yoox has proved an expensive asset.

Now that Richemont [alongside Kering] appears to be hedging its bets, speculation has grown around the possible creation of a luxury e-commerce group with critical mass and ties to both the conglomerates and Asia.

''I'm not sure it will be a winner-take-all situation,'' said Antonio Achille, global head of luxury for McKinsey. ''But there is no doubt that Amazon will enter the game, or that there will be further consolidation.''

Some executive shuffling suggests that luxury companies are readying themselves for this new era. On one recent Monday. Yoox Net-a-Porter announced that Geoffroy Lefebvre, group digital director at Richemont, would become its chief executive in January.

Meanwhile, Matchesfashion.com said it had poached Yoox Net-a-Porter's global buying director, Elizabeth von der Goltz, for the newly created role of chief commercial officer.

And LVMH's digital chief, Ian Rogers, confirmed that he is leaving to join a French cryptocurrency start-up called Ledger.

Last week, the Geran luxury e-commerce start-up Mytheresa, formerly part of Neiman Marcus, said it had filed for an initial public offering in the United States to take advantage of the boom in online sales.

Professor Galloway says that for the players the calculation is simple :

''Luxury is struggling with the fact e-commerce is basically becoming Amazon in the West and Alibaba in the East,'' he said, before making an analogy to World War II.

''None of them can fight the Germans on their own, so they need to ally with the Russians, which in this case is Alibaba. This is like the Russians and the British and the Americans getting together. They are competitors. The real enemy, however, is in Seattle.''

The Honor and Serving of the Latest Global Operational Research on E-Commerce and the Global Markets and Challenges, continues. The World Students Society thanks authors Elizabeth Paton and Venessa Friedman.

With respectful dedication to the luxury e-commerce giants the world over, and then Students, Professors and teachers of the world. See Ya all prepare and register for Great Global Elections on The World Students Society : wssciw.blogspot.com and 

Twitter - !E-WOW! - The Ecosystem 2011 :

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