Yes, I heard that it even later became 30%. That makes sense. Why didn't you work with Hong Kong gray market buyers who collaborate with boutiques to buy pre-orders, especially in China?

We need to clarify the definition of a gray market. On Farfetch, we have brand and boutique supplies. I wouldn't necessarily call that the gray market. We have other local players whose transactions are not transparent, like how they clear customs. That's a different level of gray market. Following your definition, regarding Farfetch and Hong Kong, we want to work with those players, but we are compliant. We need to demonstrate the merchant information to end customers, which is important because we pay the duty and declare the boutique address and names. Brands can easily identify where the goods come from and catch unauthorized boutiques. So, real gray market players won't work with Farfetch because the brand can easily identify them.

When you started implementing all those restrictions, as you said, it made Farfetch way less price competitive. What started happening to demand?

Demand dropped very quickly. Soon, people on social media started talking about prices. The effect was immediate. In China, many people discuss prices and demand on social media. It was very noticeable, especially with top brands like Gucci and Kering brands. The word spread quickly, and demand shrank rapidly. Initially, it was somewhat manageable because people knew not to buy Gucci on Farfetch but rather OTB brands. At that time, we weren't working closely with OTB brands, so you could still buy Margiela or Marni with a decent discount. Demand was shrinking, but then it worsened because even OTB brands asked for selective distribution. All major brands demanded the same, making Farfetch non-competitive in pricing.