As a part of their continuing efforts to expand into the mainland Chinese online market, Richemont has joined forces with Chinese e-commerce behemoth Alibaba to develop its Net-A-Porter and Mr Porter online platforms in China.
The joint venture will feature offerings of the Yoox Net-a-Porter Group (YNAP) to Chinese consumers, and include the launch of mobile apps for Net-a-Porter store and Mr Porter, as well as online stores at the Tmall Luxury Pavilion. Alibaba will provide the technological infrastructure for the venture, while YNAP brings its relationship with more than 950 luxury brands, the companies said.
Chinese consumers make up a third of all luxury goods purchases globally, but they are increasingly spending at home, encouraged in part by an leveling out of prices, which used to be much higher in China.
Working with Richemont also lends weight to Alibaba’s attempt to carve out a niche in the luxury industry. It launched specialist site Luxury Pavilion last year, and the platform will also host Net-A-Porter and Mr Porter alongside dozens of labels from Burberry to Hugo Boss.
Alibaba, which chalks up 600 million users across its online platforms, 500 million of whom are active. This translates to a 60% share of Chinese e-commerce. in 2014 the Alibaba Group listed on the New York Stock Exchange at $25 billion, the highest initial public offering in history.
The Chinese group already operates Luxury Pavilion, a specialist retail site which it launched in 2017 on Tmall. None of this has escaped the attention of Richemont: the world’s second-largest luxury conglomerate after LVMH has struck a joint venture with Alibaba, in which it holds a majority 51% stake.
This is the latest instalment in Richemont’s high-powered digital strategy. Earlier in the year, the Swiss group wrapped up its takeover of YNAP, the world’s biggest online retailer of luxury goods, and then added pre-owned watch seller Watchfinder.com.
Criticised fin the past for selling counterfeits on its sites, Alibaba gains significantly in credibility by having Richemont on board.
The deal opens up exciting prospects for Richemont. Considering the importance of online networks as China’s shopping habits evolve, luxury players have every interest in positioning themselves to take advantage of these new opportunities – including, in all probability, Richemont’s watch brands.
Yesterday, Alibaba set a new record for its biggest annual shopping day, with US $30.7 billion in sales.