The second round of the China Luxury Summit in 2018 was held in Shanghai last week, with highlights including Chloe Reuter – co-founder of The Luxury Conversation – speaking on China’s next-gen luxury travellers, affluent Chinese families.
Presenting insights and learning from Farfetch in China was VP Commercial, Greater China, Alexis Bonhomme, who spoke about the consumer, the successes and the challenges that Farfetch is facing, and key trends for where the market is heading into 2019.
Highest spending, youngest consumer
The Chinese customer is the youngest Farfetch customer globally and also the biggest spender. The Luxury Conversation has previously noted that other industries also experience that their Chinese customer is one generation younger than globally.
Farfetch appeals to the sophisticated shopper
The Farfetch inventory is worldwide, with 3,200 brands (as of September 2018). When the customer buys a product, it isn’t ‘shipped from Farfetch’, but whichever store or brand inventory is holding it. This means that the Farfetch customers know what they want: if they are looking for the last piece of a limited-edition jacket, they can find it.
The challenge – speaking to more
Noting the above as the strength of Farfetch, Alexis explained that their next development will be in attracting more customers – those who may not know exactly what they are looking for and are seeking more recommendation and knowledge of ‘what’s hot’.
Personalisation and customisation are the next big evolutions of luxury, explained Alexis. Wealthy consumers can ‘have it all’, and they definitely do not want to have the same as others. Personalisation has concerned some in the digital world, as it slows down the process – yet Alexis described that the customer is willing to wait for personalisation – and they are certainly willing to pay more for it.
Other notable trends were casualwear – that consumers are looking to mix and match sneakers with luxury labels – and it’s important to know that wealthy Chinese customers take their trends and learning from Instagram, with Alexis revealing a significant part of their China customers preferring to browse it: “Whatever you do on Instagram with your brand globally, we see it instantly in China also.”
The power of social CRM
It’s a great term – but what does it mean? Social CRM means that you can learn about your customer easily. The way Farfetch does it is to take the five different needs that brands have when they enter China – i.e. seeking an agency for media, for CRM, for 3rd party set-up, for content and promotion, and then Farfetch reduces this to provide three pillars in one service to brands; one for social and content, one for CRM, and one for advertising and promotion. Farfetch organize this new strategy for brands around their China Gateway solution.
What this means is that social CRM can send the right messages to the right people, at the right time. It allows you to see who are your top customers and reward them – for example on Farfetch, those customers who spend over 100,000 RMB a year have a private stylist making new, personal recommendations to them.
They also hold offline events whereby a top VIP customers meet directly with the brand. They do not need to have purchased from the brand before, but the brand can speak with them and find out the true trends and desires of this consumer, who is in effect a KOL.
Learning from other categories
Learnings should be taken from FMCG, said Alexis, an industry that excels in customer CRM programs. The cost-per-acquisition has dramatically increased those last 5 years (for example on WeChat) – only for following, with no knowledge of whether a sale will be made. Therefore, it’s wiser to work with who you already have and entice them to return through valuable CRM programs – and importantly, you can then base the offer on data that you already have.
In China for +9 years, Alexis Bonhomme is currently Farfetch Greater China Vice President, in charge of commercial. Prior to Farfetch, Alexis was the Co-Founder of CuriosityChina, a digital and tech company for luxury brands acquired by Farfetch in June 2018. Alexis has been awarded 3 years in the row by Campaign Asia as Digital Entrepreneur of the year / A List (2015/2016/2017) and is currently based in Shanghai.