Alibaba and Richemont stump up $1.1bn for Farfetch partnership
Chinese e-commerce giant Alibaba Group has confirmed media reports about a tie up with online luxury fashion platform Farfetch.
Both it and Swiss group Richemont will invest $600 million ($300 million each) in Farfetch and $250 million each for a 25% stake in a newly formed Farfetch China joint venture. The latter’s shares jumped about 9% in after-market trading.
Farfetch will launch shopping channels on Alibaba’s Tmall Luxury Pavilion and Luxury Soho platforms as well as its cross-border marketplace Tmall Global. The venture, which counts Alibaba competitors JD.com and Tencent Holdings among its investors, will be able to expand its reach to Alibaba's 757 million consumers.
Daniel Zhang, Chairman and CEO at Alibaba Group, says: “This highly complementary partnership brings together some of the world’s leading luxury retail and technology platforms, representing another milestone in our strategy to meet the rapidly growing demand for luxury products in China.”
“The Chinese luxury market – which is expected to account for half of global luxury sales by 2025 – consists of hundreds of millions of young, digitally-native consumers. By partnering with Farfetch and expanding our existing relationship with Richemont, we will accelerate the digitisation of the global luxury retail industry and transform the luxury shopping experience for consumers.”
José Neves, Farfetch Founder, Chairman and CEO, comments: “This announcement is a major step in our mission to connect the curators, creators and consumers of the luxury fashion industry.”
“The new initiatives with Alibaba Group and Richemont extend our strategy to power the digital transformation occurring across the luxury industry, which has been accelerated by the unprecedented challenges resulting from the Covid-19 pandemic.”
“The Luxury New Retail initiative will explore ways we can help the wider industry move forward and thrive in the post-Covid world,” he concludes.
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