A global strategic partnership between Alibaba, Richemont and Farfetch will provide brands improved access to China’s luxury market.
Partnerships expanding the ecosystem
Farfetch will launch on Alibaba Group’s Luxury Platforms in China, e.g. Alibaba’s Tmall Luxury Pavilion and Luxury Soho platforms as well as cross-border marketplace Tmall Global. Alibaba and Richemont will invest US$500m in Farfetch China. This will give the a combined 25% stake in a new joint venture which will include Farfetch’s marketplace operations in China.
Luxury New Retail (LNR) is an initiative that will combine Farfetch’s and Alibaba’s omnichannel retail technologies. This will fully connect ecommerce websites and apps, providing shoppers seamless access to Farfetch and Tmall Luxury Pavilion marketplaces.
COVID-19 has unlocked categories that have historically been difficult to digitise
Along with Food, Luxury has been one of the more difficult categories to digitise. When offline stores closed following travel restrictions, a digital platform that sold luxury brands became particularly relevant. Brands have historically been concerned about counterfeits / IPR problems, but Alibaba is policing in an aggressive way to protect merchants.
Now more than 200 brands trade on Alibaba’s luxury platforms, growing their businesses and interacting with consumers. Tmall Luxury Pavilion, for example, allows brands to provide the tailored experience that they offer from their bricks-and-mortar stores to China’s online shoppers.