Farfetch Ltd. (FTCH), an online retailer of premium goods, has experienced increased demand in 2020 and many other e-commerce players. Although sales growth this year indicates that long-term growth could be possible on the company’s platform.
In 2020, sales of Farfetch’s premium merchandise increased 64 % compared to the previous year. According to the company, it is expected that the upcoming year will also be successful, despite some traditional stores returning to work. In 2021, the management forecasts a 35 to 40% increase in the gross merchandise value (GMV) of all goods sold. The strong outlook for Farfetch is supported by its strong first-quarter results, which saw GMV rise by 50 % YoY to $ 916 million, bringing total quarterly revenue up by 47 % to $ 485 million.
Farfetch Ltd. (FTCH) primary business involves selling premium goods online, including apparel and accessories. Products are sold in more than 1000 boutiques across 50 countries. Customers can access Farfetch across 190 countries. Additionally, the company operates Browns offline boutiques. Both buyers and sellers can use Farfetch’s services. These include e-commerce storefronts for merchants, tools for managing warehouse stocks and logistics, programs for analyzing activity, etc. The platform is monetized by charging a commission of 25 – 33 % to sellers.
Over the long run, Farfetch’s business is likely to remain on an upward trend. Regardless of the removal of all restrictions, management believes that e-commerce will remain in high demand despite the change in consumer habits caused by the pandemic.
Alibaba (NYSE: BABA) is also a partner of Farfetch, which enables it to offer an expanded product lineup, especially in China. So far this year, thousands of new brands have been added to Alibaba’s offering. Adding new users will have a positive impact on monetization soon.
Farfetch Limited (FTCH) trading at $40.18 ended Friday’s session higher by 0.60%. There were 4.55 million shares traded, which is less than the average daily volume of 9.23 million shares in the last 50 days. In the previous 12 months, FTCH shares had risen by 194.57%, but they have fallen by -4.11% in the past week. Stocks have dropped -40.89% over the past three months, while they lost -10.89% over the past six months. Additionally, its current market value is $14.15 billion, and its number of outstanding shares is 355.05 million.