Farfetch Shuts Down Beauty Division
Despite its ambitious efforts to penetrate the beauty market, luxury online retailer Farfetch has chosen to discontinue its beauty segment by 31 August. This decision highlights the inherent challenges e-commerce platforms face in the booming beauty industry.
Earlier in 2022, Farfetch had acquired high-end beauty player, Violet Grey, subsequently launching its online beauty store that featured prestigious brands like Augustinus Bader, Dr Barbara Sturm, and Charlotte Tilbury Beauty. The company was celebrated for its diverse beauty brand inventory and marketing approaches that defied conventional beauty standards.
The beauty sector, known for its high consumer engagement and constant innovation, is however challenging for e-commerce ventures. Consumers often prefer tactile experiences when choosing beauty products, making online-only retailing hard. Although digital spaces like TikTok and YouTube are rife with beauty content, converting viewers into customers is another hurdle. E-retailers must offer added value to differentiate from industry giants like Sephora and Ulta.
After thriving during the pandemic’s online retail surge, Farfetch has been navigating challenges, including inventory management and fluctuating demands. However, in a positive note, the company reported an 8% revenue growth in Q1 2023, reaching $556.4 million. As September begins, Tim Stone will step in as Farfetch’s new CFO, following Elliot Jordan’s previously announced departure.