Farfetch, the renowned luxury e-commerce platform, has been setting benchmarks in the industry with its strategic alliances and remarkable financial achievements. Following their collaborations with JD.com and Harrods, the company recently unveiled its first annual results post its successful IPO. Despite still operating at a loss, Farfetch reported an unprecedented gross merchandise value (GMV) of $1.4 billion in 2018, marking a significant 56% increase from the previous year. The fourth quarter alone saw a staggering $466 million surge in GMV, reflecting a 51% growth rate. These figures surpassed the company’s expectations and underscored their ability to gain market share at a rapid pace compared to the overall online retail sector.
Although GMV solely represents the total value of goods sold on the platform and not all of it converts to revenue, Farfetch witnessed a notable uptick in revenue as well. The overall revenue for 2018 escalated by 56%, with a corresponding 55% surge in Q4. Additionally, the last quarter saw a 45% rise in active customers and a remarkable 58% increase in the number of orders placed.
José Neves, the visionary Founder and CEO of Farfetch, expressed his delight with the company’s performance, labeling 2018 as an exceptional year for Farfetch. He underscored the company’s dominant position in the online luxury market and outlined ambitious plans for global expansion, including a strong focus on the thriving Chinese market through the acquisition of JD.com’s Toplife.
Despite grappling with losses, Farfetch’s financial forecast remains robust, projecting substantial growth opportunities within the luxury segment. The company is confident in its ability to capture a significant share of the projected $500 billion luxury market and an additional $100 billion in online sales over the next decade.
A deep dive into the financial figures for the full year and last quarter showcases a significant uptick in customer spending on the platform. While Farfetch continues to face losses due to ongoing investments and expenses, the adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) for 2018 widened, albeit showing a narrowed loss in the last quarter compared to the same period in 2017.
Despite a decrease in gross profit margin in Q4 2018, Farfetch’s shares witnessed a positive resurgence in after-hours trading, affirming investor confidence in the company’s growth trajectory. With all three geographic regions experiencing over 50% growth in GMV in 2018, Farfetch is optimistic about replicating these results in the coming year. The firm’s aggressive expansion initiatives, strategic partnerships, and robust financial performance position it as a key player in the global luxury e-commerce domain, with promising potential for sustained growth in the future.
For more information on Farfetch’s recent financial results and strategic partnerships, visit Farfetch for the latest updates. Additionally, you can explore insights on the luxury e-commerce sector and industry trends at Business of Fashion.
