Q&A: Farfetch.com’s Jose Neves on his business beginnings, etail in emerging markets and multi-channel thinking

News just in: Farfetch.com, the curated marketplace for independent boutiques has raised $18 million of further funding to help growth in Brazil, Asia and America. Launched in 2008 by Jose Neves (originally a shoe designer and also the brains behind B Store and Swear), Farfetch works like an upscale high street where boutiques can spread their reach to customers in 100 countries. Jose agreed to answer some of my questions on his business beginnings, the challenges of etail in emerging markets and his multi-channel strategy…

DISNEYROLLERGIRL: What is your background and where did your interest in business come from?
JOSE NEVES: I always wanted to be an entrepreneur; in fact I started my first business – a software company producing ERP systems – while at university. I used to be into computer programming. I have never been employed by an independent company and I guess by now I must be pretty much unemployable as a result! I was born in Porto, very close to the shoe and textile cluster in Portugal, and my grandfather was a shoe producer. In those days the shoe industry was still booming in Portugal so I decided to try my luck designing shoes (very unusual considering my education was in Economics). It turns out my designs were very popular when I started showing them at the trade shows, so I launched Swear internationally in 1995. I came to London to open our first flagship store in 1996.

After that I ran my 2 businesses (the shoe business, Six and the tech business, Grey Matter) concurrently until in 2007 when I started farfetch.com and decided to dedicate my software-programming workforce exclusively to farfetch.com. I still own Six, which owns Swear, B Store (for which we scooped a British Fashion Award in 2006) as well as licenses for Opening Ceremony and Ksubi.

DRG: Can you tell me how the Farfetch.com concept came about?
JN: I always wanted to create a business merging fashion and technology – my two passions. In 2007 it struck me that independent retailers (we enjoy great relationships with the industry’s top independents at Six) were clearly losing the online battle, at a time when consumer behaviour was changing dramatically. It was clear to me that the ‘laws of the internet’ demanded huge investments in terms of team and infrastructure in order to scale and operate profitably online. The examples of independents who have made it online just underline this, as they have become much larger online than offline.

So, on one hand we had the traditional beacons of innovation and creativity in fashion (the independent retailer) with a curated selection that was more than ever relevant at a global scale to international fashion lovers. On the other hand we had the serious barriers in terms of human resources, capital and infrastructure to allow these independents to gather scale and operate at the same level as the industry leaders. Farfetch.com aims to be that connector, the ecommerce-enabler for the best independent boutiques. This way, fashion lovers around the world can access their curated product selection and groundbreaking fashion vision.

DRG: Was it difficult getting people to understand the Farfetch concept and take it seriously?
JN: Some people do struggle to understand the concept. It tangentially shakes some of fashion’s old beliefs. This is not exclusive to Farfetch.com. When Boo, ASOS and Net-a-porter launched, the idea of selling clothes online seemed quaint to say the least (if not abhorrent).

Fashion, even with all the talk about constant innovation, is a very traditional industry in its methods (this contrasts with the innovation in its products). Once the concept is explained, and we’ve walked people through how we select our boutiques and how we represent an unrivalled range of designers, and support not only the traditional foundation of fashion houses but also the new up-and-coming talents (which can no longer expect to be incubated by the world’s leading etailers), then most people tell us they get it, and they love the concept.

DRG: Farfetch.com now has customers in over 100 countries, what are the challenges of this? Did you get any unexpected surprises in how different cultures shop?
JN: It is a challenge, indeed. We have 4 versions of the web site (international, US, France, Brazil) in 3 languages and a variety of payment methods. We understand that this is not enough and we will be introducing more support, not only for regional payment methods but for our internal team, to get a better understanding of specific markets.

DRG: What are some of the main differences in cultural shopping habits and how have you approached them? I know that in Brazil they expect excellent service, deferred payment and easy returns which you have facilitated….
JN: Brazil is a great example. First of all, the assumption that most people speak English, which may hold true in Scandinavia or Holland, does not work for Brazil. It is a huge, until recently self-effacing super-power, with its own fashion designers, its own luxury industry and very specific shopping habits.

Offering split payments (we offer 3 months, but competitors offer up to 12 months) is mandatory, the sizing system is different (they don’t even use S, M, L, XL) and there are dozens of local designers you must represent if you want to become a ‘preferred fashion destination’.

DRG: How important is editorial content on an ecommerce site like Farfetch.com?
JN: We have a very different approach to other etailers. We do not want to be a ‘magazine you can shop from’. A magazine is by definition a one-direction, one editorial team exercise. The editors tell the audience what to wear (or what to see, visit, etc). Farfetch.com is a community, and we try to create editorial content which is community focused, inviting the members and tastemakers of the global fashion community to contribute to our content production. We call this section of our web site “People”, and we try to complement this philosophy with our Facebook, Twitter and Instagram presence. There’s a lot to do in this area as we feel we are still in our first steps.

DRG: You have initiated projects with bloggers, most recently a collaboration with six international fashion bloggers and your shoe company Six. When did you realise the power of bloggers as tastemakers to drive traffic to your site and sales through the affiliate marketing programme?
JN: It’s not about traffic or sales, rather, it’s a branding exercise. Farfetch.com is the hub of a global fashion community. Bloggers are a big part of this community so it seems natural for our brand to associate itself with them in exciting projects such as this.

DRG: What do you see happening in the next 5-10 years with etail?
JN: I really believe in multichannel. You may come up with different numbers when you ask anyone the question ‘What % of fashion purchases will be made online vs offline?’. Maybe 30%, or 40% or 50%? Whatever the answer, it exposes the fact that people will always want to buy fashion in a physical environment as well as online. Propositions which can merge the physical experience with the virtual one will be the next big thing, as consumers simply do not differentiate online/offline in their day to day lives (not in many other industries and soon not in fashion either).

DRG: What is the most rewarding thing about seeing Farfetch.com grow?
JN: The most rewarding thing is to hear from amazing, long-established retailers (some over 100 years old) that Farfetch.com is giving them access to customers from all corners of the world who would never find them otherwise, and also having a huge positive impact on their performance as businesses in such difficult times.

DRG: And the most frustrating?
JN: Not being able change the dynamics and mentalities of people who are very traditional in thinking and still afraid or sceptical of the web.

DRG: How do you manage your time?
JN: I’m not particularly sophisticated at all. So far I have resorted to the usual tools of a well-kept diary, an effort to be realistic in terms of how much I can squeeze into a day and the awareness of the fact that one needs to delegate more and more as the business grows.

DRG: Can you share some of your favourite digital tools/apps?
JN: I love running, so one of my favourite iPhone apps is RunKeeper. It even stores the maps of your previous sessions, so I collect and look back on these maps from all around the world. I’m trying to play around with Instagram too, it’s a great little app – fascinating to see how such a simple idea can create such a craze.

The boutiques on Farfetch include Feathers, B Store and The Convenience Store. I also love the vintage offerings from A.N.G.E.L.O Vintage in Italy. Some of my favourite Farfetch items:

TOP: Marni striped sweater; Cartier vintage sunglasses; Awai leather camera bag
BOTTOM: Stella McCartney faux-leather shoes; Vintage Guy Laroche set of 3 bangles; Fornasetti tray