Digital Competition in Fashion & Luxury Goods: YNAP versus Farfetch - Teaching Note

In 2015, Yoox CEO Federico Marchetti spearheaded the deal of a lifetime, merging Yoox Group with Net-a-Porter Group. But in 2017, two years later, the financial community was expecting him to deliver results. Moreover, a new threat had emerged. Farfetch, a luxury platform that aggregated the inventories of over 500 luxury boutiques all over the world, had reached US$800 million in sales after less than 10 years of operations, with a staggering 70% year-on-year growth. The case presents the business of personal luxury sold through e-commerce platforms, a market that was experiencing important growth in the late 2010s. The main drivers of this growth are presented, as are the main players and the most important geographical considerations, such as the great number of Chinese customers. The business models and strategies of both Yoox and Net-a-Porter are presented, particularly in regards to the synergies of their merger, given their very diverse strategies and customers. They are contrasted with Farfetch's novel, marketplace approach. The case finishes by asking how the post-merger YNAP Group can position itself against current and future threats, and whether its current strategy is adequate or could be tweaked or changed to stimulate growth, which has fallen below the market average.