HONG KONG — Farfetch.com founder José Neves said the luxury retail portal plans to open an office in China and a Chinese version of the Web site in two years, pointing to the country’s growing appetite for online shopping and luxury goods.
Neves, the company’s chief executive officer, was speaking ahead of a gathering where he presented some of the site’s top-selling boutiques, including Paris’ L’eclaireur, London’s Hostem, the U.S.’ Curve and Henrik Vibskov, available in Copenhagen, Oslo and New York, to media Thursday.
Farfetch, started in 2008, carries inventory from 120 independent boutiques around the globe and receives 2 million visitors a month. Its offerings have price tags in the low hundreds to the low thousands of dollars, and the company delivers to any location serviced by DHL. Farfetch has grown 150 percent a year since it was established and has annual revenues of $60 million, Neves said.
The U.S. accounts for the lion’s share of Farfetch’s business with 20 percent of total sales, followed by the U.K., Australia and Brazil. The proportion of sales to China are small by comparison, at 1 percent.
For the company, which already has offices in London, Los Angeles, New York, Portugal and São Paolo, a key to further developing in China is establishing a physical presence there.
Neves said the company planned for the office to open and the Chinese site to be operational in two years, but not earlier. However, no agreements are in place yet. When it goes live, the site will offer more Chinese designers and use a local payment system.
Chinese shoppers currently can make purchases through the global English language site. Neves said most of Farfetch’s orders from the country came from Beijing and Shanghai. While Chinese shoppers tend toward well-known brands like Burberry, Gucci and Dolce & Gabbana, a growing crop are buying smaller labels like Damir Doma and Mary Katrantzou. Chinese shoppers to Farfetch are more cautious than others about counterfeiting and the authenticity of the goods, he said.
Farfetch’s designs on China come as e-commerce grows at a furious pace in the country. According to a report by Boston Consulting Group released earlier this month, by about 2015 the number of Internet users there will increase by 200 million to 700 million, double that in Japan and the U.S. combined. China is likely to become the biggest online retail market in the world, with Internet retail sales tripling to more than $360 billion by 2015.
Neves said the percentage of sales that occurred online was still small in the country and that he believed e-commerce would continue growing at its current pace in the near future. “We are still in very early days,” he said.
However, the ceo is taking a cautious approach. “It is not an easy market. If you think about some of the big online companies that tried to make it there, they did not do so well,” he said.
He noted there was intense competition on the ground. “You need to be courageous,” he said.
Homegrown luxury online-shopping sites Xiu.com, Shangpin.com and Vipstore.com are already attracting large numbers of Chinese customers. Shenzhen-based Xiu raised $100 million from private equity firms last year.