What: online company Farfetch grows significantly in 2020 and partners with Alibaba’s Tmall.

Why it is important: Farfetch appears to be getting closer to profitability. Shows up how brands lose out on wholesale.

Farfetch has announced revenue growth in 2020 of 64% to $ 1.7 billion. The year 2020 was described as a landmark year with very uneven quarters. But investments in services such as same-day and 90-minute delivery, fit technology to help with sizing, for example, helped establish the company as an online luxury destination. Overall, the company reported a loss after tax of $ 3.3 billion due to investments in convertible notes in early 2020 from Tencent and US Dragoneer. Further higher costs relating to Brexit will likely impact near-term margins. Meanwhile it is working on strengthening its brand partnerships.

Farfetch is launching on Alibaba’s Tmall (after shutting down on JD.com). This partnership is described by founder Jose Neves as a “slow burn” designed to “test and fail and learn”. Farfetch is not alone on the luxury market, however. Mytheresa said it had a 28.2% rise in active clients last quarter, and Revolve is is investing also.

According to Vogue Business, brands see greater benefits from going on Farfetch than selling wholesale. See graph below:

Farfetch graph

Farfetch reaches profitability after 12 years 

Farfetch Prepares to Turn On With Tmall 

01.03.21 FINAL FARFETCH Launches Storefront on Tmall's Luxury Pavilion