Johann Rupert’s Richemont plans for fashion joint venture with Alibaba
The conglomerate will bring its luxury brands to large Chinese market
Luxury brands conglomerate Richemont, which is controlled by the Stellenbosch-based Rupert family, has secured a joint venture partnership with e-commerce giant Alibaba to launch a retail platform for the sprawling Chinese market.
At the weekend, Richemont said the global strategic partnership would involve bringing the upmarket fashion offerings of its online retail platform YOOX Net-a-Porter (YNAP) to Chinese consumers.
The Far East hub is Richemont’s largest revenue area, with sales of €2.13bn being registered in the five months to end-August.
The group said the partnership would entail YNAP and Alibaba establishing a joint venture to launch two mobile apps for YNAP’s Net-a-Porter and Mr Porter online stores. Alibaba will provide the technology infrastructure, marketing, payments and logistics to support the venture.
In recent years, Richemont has been pushing its online offerings, and this effort was underlined when the group acquired full control of YNAP earlier in 2018.
Richemont, which owns luxury brands such as Cartier, Mont Blanc, Lancel, Van Cleef & Arpels, Baume & Mercier and Jaeger-LeCoultre, only transacted about 1% of group sales in e-commerce before it took full control of YNAP
The e-commerce sales figure is now between 15% and 20%, but could grow further on the back of the Alibaba partnership.
In the year to end-March, Alibaba reported revenues of almost $40bn.
Richemont chair Johann Rupert said Chinese customers, at home and abroad, are an increasingly important customer base for Richemont. “Our digital offering in China is in its infancy and we believe that partnering with Alibaba will enable us to become a significant and sustainable online player in this market.”
Rupert maintained Alibaba had become the preferred online destination in China. “Through this joint venture, we look forward to opening the important Chinese market to Net-a-Porter, Mr Porter and the luxury brands they offer their clientele.”
Alibaba CEO Daniel Zhang said the multifaceted partnership would bring Chinese consumers unprecedented access to the world’s leading luxury brands.
He emphasised that Chinese consumers are expected to account for nearly half of the global luxury market by 2025. “Through this partnership, Alibaba and YNAP will be even better positioned to capture this compelling market opportunity.”
Zhang hinted at further collaborations with Richemont. “We believe this announcement is just the beginning of a long-term partnership, and together we are committed to exploring many more opportunities to collaborate in the future.”
The Alibaba-YNAP partnership will also see Net-a-Porter and Mr Porter online stores launched on Alibaba’s Tmall Luxury Pavilion, a platform hosting leading luxury brands.
The Tmall Luxury Pavilion aims to replicate the brand exclusivity and tailored shopping experience customers enjoy in luxury brand boutiques.
Richemont added that YNAP and Alibaba would also explore future offerings to enable the joint venture’s clients to enjoy seamless online and offline shopping experiences through digitising and fully integrating the retail value chain, from merchandising and marketing to payments and last-mile delivery.