Hasta La Ideas

Guest article by Stephany Zoo

E-commerce site Fab.com is making waves in China after Shenzhen-based web giant Tencent recently decided to invest $150 million at a $1 billion valuation. Fab stands apart from other Western e-tail giants like Amazon and eBay, promising the online consumer a sensible selection of tasteful—yet edgy—products for everyday use. It’s a major success in the US, with impressive numbers behind their growth since they (re)launched just two years ago. Given the recent attractiveness of online retail in China, Fab hopes to expand into the Chinese market with Tencent’s support.

However, Tencent’s investment is not necessarily a stamp of success either—as previously shown by Groupon’s failed entry into the Chinese market. How will Fab fare among the existing lean, mean, e-commerce machines of China, led by the most cutthroat of home-grown entrepreneurs?

Taobao reigns supreme

While Fab has seen success in the US, they have pivoted far from its previous incarnation as a gay social network, and even further from the niche ecommerce startup they were originally. By now, they’ve staked a claim to be a curated version of Amazon—much more mass market, with pricepoints accessible to anyone. However, this already exists in China: based on the company’s price range and item selection, the majority of similar products are already available as comparable quality copycat items on Taobao, with entire stores dedicated to emulating Fab. No one can compete with Taobao prices. Fab sells everyday design at what is considered “affordable” prices for US consumers but bear what Chinese consumers would consider to be a substantial premium markup. Fab’s brands will run into the counterfeiting problem already all too familiar for luxury brands but will suffer at an even greater expense. Unlike luxury brands, they don’t benefit from the distinguished status or quality assurance that comes with the big couture names that brand-conscious Chinese consumer are looking for.

Does Fab care about Chinese emerging brands, or just sales in China?

About half a year ago, Fab.com launched a similar marketing campaign in India, partnering with the country’s largest media firm, Times Internet. With huge populations and developing e-commerce markets as common denominators, both India and China make obvious targets for the company’s strategic expansion. However, this calls to question Fab’s interest in Chinese design in particular. Can Fab.com really, truly serve the Chinese designer? Is the company dedicated to creating and honoring the voice of Chinese innovators or promoting Chinese creativity? Or is Fab just a corporate machine focused solely on amassing the world’s most lucrative consumer base?

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