How the merging of Yoox and Net-a-porter could change the e-tail industry
Hong Kong was slow on the uptake with the online shopping craze, but it's caught up rapidly. In the past five years, I've spoken to many customers who've been converted by the ease of online shopping.
Mobile platforms continue to grow in influence, especially among the millennial generation, and in Asia. Shopping for fashion has changed so much that it's no wonder there are movements afoot at some of the biggest companies in the game.
Among the most significant is the merger announced last week between Italian online fashion giant Yoox and famous e-tailer Net-a-Porter. Yoox has bought competitor Net-a-Porter outright from French luxury group Richemont, which only acquired the company in 2010. The result is a fashion behemoth focused on online retail and the lucrative luxury market.
Net-a-Porter's excellent branding, highly editorialised content and its glossy Porter magazine made it a prime example of what an online store could and should be. Despite this, analysts have estimated that Richemont has struggled to turn major profits from the e-tailer. But the company remains the most recognisable fashion e-commerce store around, capturing a clientele that are increasingly looking online for all their sartorial needs. In many ways, it sets a standard for many multibrand online stores to follow.
Founded by ex-investment banker Federico Marchetti, Yoox has less customer recognition, but in recent years it has developed a reputation for excellent technical capabilities, most notably setting up and running the online shopping sites for top Italian luxury brands such as Roberto Cavalli, Jil Sander and Ermenegildo Zegna. The company has played a major role in bringing some of the more traditional fashion companies to a wider global audience. That's not all. Yoox's own website also sells previous seasons' items from major brands at a discount - they're not quite as sexy as new, seasonal, "just-in" products. Nevertheless, it's a huge money maker. It also operates a cool, high fashion, boutique-style e-tailer dubbed "The Corner", which made headway on the mainland early in the online shopping game. It seems this multi-pronged strategy has paid off handsomely for the progressive Italian company.
The new Net-a-Porter/Yoox team surely have grand ambitions to be an all-seeing, all-reaching force in the online fashion world. Net-a-Porter founder Natalie Massenet told journalists as much at a press conference. For consumers and their competition alike, it will be interesting to see how this new partnership takes hold and what changes it will bring to the market. It could very well be a game changer.
Will online retailers, for example, finally address the issue of alternate pricing around the world, and with honesty? Chanel's initial move to standardise prices globally in its bricks and mortar stores made headlines everywhere, for example. Will online stores soon follow this example?