Coupang acquire Farfetch for $500 Million
South Korean e-commerce behemoth Coupang is set to rescue the ailing luxury marketplace Farfetch, agreeing to a $500 million acquisition and providing crucial emergency funding. This move sees Farfetch abandoning its earlier plan to purchase a 47.5 percent stake in Yoox Net-a-Porter (YNAP) from Richemont.
With this acquisition, Farfetch is expected to go private, leading to the annulment of all shareholder investments, including those of founder and CEO José Neves.
Farfetch’s stock plunged 38 percent in pre-market trading on Monday following the news. Since 28 November, when the company called off its earnings announcement amidst discussions about privatization, its shares have nosedived 68 percent. The company’s market cap plummeted to \(254 million from its \)26 billion peak in February 2021, with the current stock value falling below $1.
Coupang, often labeled as the ‘Amazon of Asia,’ emerged as an unforeseen savior. Last week, Sky News speculated about the involvement of Apollo Global Management and investment firm Greenoaks, known for its October investment in Skims, as potential investors. Greenoaks also happens to be an investment partner of Coupang.
This acquisition appears strategic. Coupang, a Fortune 200 company headquartered in South Korea and Seattle, has been listed on the New York Stock Exchange since March 2021. It dominates markets like South Korea, Taiwan, China, Singapore, and India, though its US operations are still nascent. Through acquiring UK-headquartered Farfetch, which also trades on the New York Stock Exchange and caters extensively to the US market, Coupang aims to bolster its American footprint. (Coupang did not disclose the terms of the deal.)
Logistics Meets Luxury
According to industry analysts, Coupang’s logistical prowess aligns well with Farfetch’s needs. Coupang has heavily invested in its end-to-end fulfillment and logistics infrastructure, including AI and custom robotics. By 2022, it held 1,362 patents for tech innovations across various markets, including South Korea, the US, and Taiwan.
"Coupang’s established success and advanced expertise in transforming commerce will empower us to provide exceptional services to our brand and boutique partners, as well as our global customer base," stated Neves in a press release.
Learn more about Coupang
- (3) Coupang’s Big Bet on Taiwan: What Are the Key Drivers of Growth? | LinkedIn
- The Rising Ecommerce Giant in Asia: A Deep Dive into Coupang’s Triumph in Taiwan – Tenten | Digital Product Studio
- Amazon of Asia Takes On Luxury: Coupang’s Bold Acquisition of Farfetch Shakes Up Online Fashion – Tenten | Digital Product Studio
- 韓國零售巨頭 Coupang 以5億美元收購困境中 Farfetch
- 南韓與臺灣的電子商務的比較。 – Tenten | Digital Product Studio