Luxury goods via Whatsapp, the new easy shopping way to buy

8 years ago - Published in Finance, Fundamental Analysis

Online luxury retailer Yoox Net-a-Porter said it’s developing technology to allow well-to-do customers to buy products directly through WhatsApp as the e-commerce market for Prada and Versace goods becomes more competitive.
As the Independent reported, the platform’s personal shoppers already message clients on the Facebook-owned service and Chief Executive Federico Marchetti says that the Milan-based company plans to expand its use of the app but did not set a date for the launch of the feature.

Yoox Net-a-Porter is jumping on the WhatsApp opportunity because Net-a-Porter’s mobile customers place more than double the orders of desktop users, and those purchases on average are about twice as valuable. The company is still testing its technology and has no scheduled release date.
“We’ve made some of our biggest sales to EIPs by chatting to them through WhatsApp,” Marchetti said, according to The Independent.
According to the newspaper, customers accessing the Net-a-Porter website on a mobile device place more than double the orders of desktop users, leading strategists to focus on mobile access as an area of development. He declined to give details on how payment via WhatsApp would work.

WhatsApp changed its privacy rules in August to allow companies to communicate directly with its 1 billion users as Facebook Inc. looks to start recouping some of the $22 billion it paid to buy the service.

Research firm Forrester has forecast the online luxury market will more than double to $39 billion by 2021, but YNAP, Farfetch and others are aiming for a growing slice of that business. Farfetch’s sales are growing about 60% a year, according to analysts at Exane BNP Paribas. The company was valued at almost $1.5 billion in a funding round last year and is said to be planning an IPO, as Bloomberg reported.

So far the fashion industry has been slow to capitalize on the opportunity of messaging. In China, the WeChat app has more than 700 million users — many of whom have their bank accounts linked to the service. While 92 percent of global luxury brands use WeChat for marketing, only a small proportion of them sell directly through the app, according to digital researcher L2.