British platform Farfetch has secured funding from Chinese giant Tencent in a move to strengthen its presence in the Chinese market and establish Tencent as a key player in the luxury sector. Tencent, known for owning social networks WeChat and QQ, has been making strides in the luxury industry recently. It announced a partnership with Italian fashion house Gucci focused on native content and approached Burberry to support its retail strategy in China. By investing $125 million in Farfetch, Tencent aims to support the platform’s long-term growth and enhance its offering and customer experience in China.
The competition between Tencent and Alibaba to capture the attention of Chinese consumers who are increasingly interested in luxury goods and services within their own country is fierce. Last September, luxury e-retailer Net-A-Porter partnered with Alibaba’s exclusive Luxury Pavilion (TMall). Farfetch, founded in 2007, already had a presence in the Chinese market through its social activation strategy on WeChat, collaborating with Key Opinion Leaders on mini-programs and influencer campaigns. With this new partnership, luxury brands in Farfetch’s portfolio could gain privileged access to the features continually rolled out by WeChat, which has over a billion users.
Overall, Tencent’s investment in Farfetch not only signals its ambitions in the luxury sector but also highlights the growing importance of the Chinese market for global luxury brands and platforms. The strategic partnership between Tencent and Farfetch aims to capitalize on the increasing consumer demand for luxury goods in China and create a seamless and enhanced shopping experience for Chinese customers.
