Farfetch, Alibaba Group and Richemont: A New Global Partnership to Accelerate Digitization of Luxury Industry
Yesterday, the three companies announced a global strategic partnership to provide luxury brands with enhanced access to the China market
Leveraging each company’s respective expertise and extensive reach, Farfetch, Alibaba Group and Richemont sign a new global partnership to accelerate gigitization of luxury industry. The partnership will bring luxury retail to the next generation by seamlessly integrating the digital and physical realms.
With this partnership:
Farfetch to Launch on Alibaba Group’s Luxury Platforms in China: Farfetch will launch luxury shopping channels on Alibaba’s Tmall Luxury Pavilion and Luxury Soho platforms as well as Alibaba's cross-border marketplace Tmall Global. The new channels expand the reach of Farfetch’s global luxury platform to Alibaba’s 757 million consumers. This will provide luxury labels with a unique opportunity to elevate their brand awareness, while also significantly expanding their addressable market of luxury consumers.
Strategic Investments in Farfetch and Farfetch China: Alibaba and Richemont will invest $600 million ($300 million each) in private convertible notes issued by Farfetch Limited. Alibaba and Richemont will also invest $500 million ($250 million each) in Farfetch China, taking a combined 25% stake in a new joint venture which will include Farfetch’s marketplace operations in the China region. In addition, Alibaba and Richemont have an option to purchase a further combined 24% of Farfetch China after the third year of the joint venture’s formation. Alibaba and Richemont will also explore additional opportunities to work closely with Farfetch to provide services to luxury brands. Separately, Artemis has also agreed to increase its existing investment in Farfetch with a $50 million purchase of Farfetch Class A shares.
Accelerating the Digitization of the Global Luxury Industry: Luxury New Retail (“LNR”) is a visionary initiative which will leverage Farfetch’s and Alibaba’s state-of-the-art omnichannel retail technologies to serve the needs of luxury businesses, including a full suite of enterprise solutions powered by Farfetch. These solutions will serve both mono-brand and multi-brand distribution strategies for luxury brands, including fully-connected e-commerce websites and apps, omnichannel retail technology, and access to the Farfetch and Tmall Luxury Pavilion marketplaces via a single integration.
Johann Rupert, Chairman of Richemont: «Building on our successful joint venture with Alibaba, these developments represent a further meaningful acceleration of our journey towards Luxury New Retail. This initiative brings together a powerful combination of highly complementary strengths - notably with our Maisons’ luxury retail expertise and YOOX NET-A-PORTER’s deep brand partnerships, expert curation and exceptional customer care - that will help us deliver a seamless omnichannel experience to our discerning clientele. Partnerships make you stronger. I am delighted to partner with Daniel, José, and François-Henri to bring our shared vision to fruition, setting new standards for the future of luxury.»
François-Henri Pinault, Chairman, Artemis: «The growth potential of luxury e-commerce has never been so promising, and the importance of China for the luxury industry is only becoming more obvious every day. Thanks to the vision of José Neves, Farfetch played an important role in improving the omnichannel experience for luxury customers in recent years. The investment by Artemis demonstrates our belief in the future of Farfetch and I am personally looking forward to exploring the future of luxury retail with this group of visionaries and experts.»
With this partnership:
Farfetch to Launch on Alibaba Group’s Luxury Platforms in China: Farfetch will launch luxury shopping channels on Alibaba’s Tmall Luxury Pavilion and Luxury Soho platforms as well as Alibaba's cross-border marketplace Tmall Global. The new channels expand the reach of Farfetch’s global luxury platform to Alibaba’s 757 million consumers. This will provide luxury labels with a unique opportunity to elevate their brand awareness, while also significantly expanding their addressable market of luxury consumers.
Strategic Investments in Farfetch and Farfetch China: Alibaba and Richemont will invest $600 million ($300 million each) in private convertible notes issued by Farfetch Limited. Alibaba and Richemont will also invest $500 million ($250 million each) in Farfetch China, taking a combined 25% stake in a new joint venture which will include Farfetch’s marketplace operations in the China region. In addition, Alibaba and Richemont have an option to purchase a further combined 24% of Farfetch China after the third year of the joint venture’s formation. Alibaba and Richemont will also explore additional opportunities to work closely with Farfetch to provide services to luxury brands. Separately, Artemis has also agreed to increase its existing investment in Farfetch with a $50 million purchase of Farfetch Class A shares.
Accelerating the Digitization of the Global Luxury Industry: Luxury New Retail (“LNR”) is a visionary initiative which will leverage Farfetch’s and Alibaba’s state-of-the-art omnichannel retail technologies to serve the needs of luxury businesses, including a full suite of enterprise solutions powered by Farfetch. These solutions will serve both mono-brand and multi-brand distribution strategies for luxury brands, including fully-connected e-commerce websites and apps, omnichannel retail technology, and access to the Farfetch and Tmall Luxury Pavilion marketplaces via a single integration.
Johann Rupert, Chairman of Richemont: «Building on our successful joint venture with Alibaba, these developments represent a further meaningful acceleration of our journey towards Luxury New Retail. This initiative brings together a powerful combination of highly complementary strengths - notably with our Maisons’ luxury retail expertise and YOOX NET-A-PORTER’s deep brand partnerships, expert curation and exceptional customer care - that will help us deliver a seamless omnichannel experience to our discerning clientele. Partnerships make you stronger. I am delighted to partner with Daniel, José, and François-Henri to bring our shared vision to fruition, setting new standards for the future of luxury.»
François-Henri Pinault, Chairman, Artemis: «The growth potential of luxury e-commerce has never been so promising, and the importance of China for the luxury industry is only becoming more obvious every day. Thanks to the vision of José Neves, Farfetch played an important role in improving the omnichannel experience for luxury customers in recent years. The investment by Artemis demonstrates our belief in the future of Farfetch and I am personally looking forward to exploring the future of luxury retail with this group of visionaries and experts.»
