Alibaba and Richemont jointly invest in Farfetch
Recently, Alibaba announced a joint investment in Farfetch with Richemont, each company investing $300 million USD in its private convertible bonds.
The three parties will establish a joint venture company in China, their goal is to operate Farfetch’s online sales business in China.
Alibaba and Richemont will each inject $250 million USD into Farfetch China, each holding a 12.5% stake in the joint venture. Farfetch states that this cooperation aims to provide luxury brands with more opportunities to enter the Chinese market and to accelerate the digitization of the luxury industry.
Alibaba said that Farfetch will open a store on Tmall International and integrate itself into the Tmall Luxury Channel.
The list of Farfetch Chinese shareholders includes three major Internet giants: Alibaba, Tencent, and JD.com.
Farfetch is a global fashion shopping platform established in 2007. with its headquarters located in London, selling products from over 1,300 boutiques and brands around the world. It became listed on the New York Stock Exchange in September 2018.
As a disruptor in the luxury goods market, Farfetch has entered an expansion track in recent years.
According to data from the Foresight Industry Research Institute, the growth rate of luxury goods consumption in China was 26% in 2019, which was much higher compared to the rest of Asia. The growth rate of the European luxury goods market has slowed down to an increase of only 1%, while sales of luxury goods in other regions of the world have even dropped by 5%.