Meet the programmer who built a $1.5bn fashion business
Interview with Jose Neves, CEO of Farfetch - the successful online platform for luxury fashion brands and independent designers
Take risks, because the world is changing! This is the advice Jose Neves, who the Financial Times last year named as one of its top 20 European tech entrepreneurs, gave to the young and aspiring entrepreneurs.
Farfetch is world’s leading high-end fashion boutique website. On the platform brands such as Alexander Wang, Givenchy, Valentino and Dolce & Gabbana sit alongside with small independent designers. It launched in 2008 with a few boutiques and now it sells the products of 500 boutiques and more than 1,600 luxury designers that pay for the company’s services are small independent traders. The company is valued at around $1.5 billion and considers an IPO within 2-3 years.
How could a man build a billion dollars business, what are the challenges on the road to success and what is the future of the fashion in the the digital era - I asked these question Jose Neves.
Jose, you’re a software developer, shoe designer and successful fashion entrepreneur. How could one man combine all of this?
I’ve always been interested in both technology and fashion; I started my first business whilst I was still at university, developing management software for the fashion industry and Farfetch is the perfect combination of my experiences. I love what I do now, but it’s completely different from what I did five years ago, and maybe that’s why I love it. I’ve never been a CEO of a company with 1,000 people before, so that keeps me on my toes and keeps me inspired, it gives me a challenge and I’m continually learning.
My experience as a boutique owner, designer and wholesale retailer gave me unique insight into this world and my experience building a previous tech company, meant I had the tech tools to visualise a solution; that solution was Farfetch. Larger retailers were launching successful ecommerce and benefitting from being able to sell to more customers. It was clear that online fashion, and even online luxury fashion, was going to be big – developing an e-commerce presence for these amazing independent retailers was going to be vital for their survival. My idea was to offer the best luxury boutiques in the world a chance to compete with big online players by coming together into one online destination - this is the foundation of the Farfetch business model.
Was the transition difficult? What were the biggest challenges?
One of our biggest barriers when we partnered with our first set of boutiques, was that luxury brands didn’t see online platforms as compatible with luxury products. Their biggest fear was their brand being used or represented incorrectly. In our initial discussions they all used the same rationale: “we want to see our brand represented next to similar brands, at similar price points and we want the audience of these websites to be our audience or even better – an audience that we haven’t been able to capture yet, but that is aligned with the brand”. This is the premise that Farfetch is built on. For our partner boutiques and brands, Farfetch acts as a community where they are brought together, can compete on an international level and reach customers on a global scale.
What distinguishes Farfetch from the other fashion online shops on the market?
We are completely unique. Our business model is based on bridging the gap between online and offline; we celebrate the independent retailer by giving them a global platform to sell through. The diversity of boutiques and brands we work with creates a far broader product offering than ecommerce businesses with traditional buying models. This allows our customers to shop an unparalleled range of brands and unique pieces from around the world.
How does the combination of luxury fashion brands and independent small designers work on your platform? How can smaller boutiques be successful when they are listed alongside bigger names? And how have the bigger names agreed to be listed along with smaller boutiques?
Our customers are unique and forward thinking, and visit the Farfetch site to discover unique fashion, regardless of whether it’s from established or emerging designers.What’s great about Farfetch is that we allow customers to access and explore the world’s greatest selection of luxury from our global curation of boutiques and brands.
Has the nature of competition in the fashion industry changed? What were the driving factors behind this change?
Looking at when we started to the present day, one of the main developments is that around 60% of our traffic now comes from mobile (including app) and tablet devices which has forced strategies to evolve towards mobile first. Our customers value a shopping experience that provides them with complete convenience. The Farfetch app allows our customers to shop onthe- go with ease. We have also partnered with Apple Music to allow customers to listens to songs selected by talent from out shoots, while they shop on the app.
What are the current trends that will shape the future of the fashion industry?
Having a combination of “bricks and mortar” stores and an online presence is the way to succeed in the future. I’m a believer in physical retail experiences; I always say “fashion isn’t downloadable”, which means the complete change that the music and video industries experienced is not going to happen in fashion. If you take the pure algorithmic approach, you will fail – you need the human element. On the other hand, you can’t ignore technology, that’s just not how people shop any more. Retailers must learn to strike the balance between on and offline.
Do you plan to diversify your business or to enter other sectors?
Our business has diversified, especially with the launch of kidswear - our most recent category, at the beginning of this year. Additionally, in September 2015 we launched Farfetch Black & White - a service-led turn-key solution that works directly with luxury fashion brands on all aspects of their e-commerce presence.
Last year you were named as one of the top 20 European tech entrepreneurs by Financial Times. What advice would you give to the aspiring and young entrepreneurs?
Take risks, because the world is changing - particularly in retail!
You’re from Portugal – a country like Bulgaria which is not very popular with successful startups on the world scene. Do the origin really matters if a man has a talent?
Having our headquarters in London - hub for fashion and technology has of course been beneficial. The majority of our tech team however is still based in Portugal as we see Portugal as a great hub for tech talent. We also now have three offices in Portugal - Guimaraes, Porto and most recently our new office in Lisbon, set up in August this year.