Richemont said Friday it is has joined with Alibaba Group in a strategic partnership to bring the retail offerings of Yoox Net-a-Porter Group to Chinese consumers.
YNAP and Alibaba will establish a joint venture to launch two mobile apps for Net and Mr Porter, with Alibaba providing technology infrastructure, marketing, payments, logistics and other technology support to the joint venture.
In addition, Net and Mr Porter will open online stores on Alibaba’s Tmall Luxury Pavilion. YNAP and Alibaba added they will also explore offerings to enable the JV’s customers to enjoy “unique and seamless online and offline shopping experiences” through digitizing and fully integrating the retail value chain, from merchandising and marketing to payments and last-mile delivery.
The partnership will focus on serving consumers in China and will extend to Chinese consumers traveling abroad.
“Chinese customers at home and abroad are an increasingly important customer base for Richemont and for the broader luxury industry,” said Johann Rupert, chairman.
“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. Alibaba has become the preferred online destination in China, with world-class teams in technology, logistics and marketing. We will work with Alibaba to ensure Net and Mr Porter’s continuing expansion as neutral, open and sophisticated platforms.”
Daniel Zhang, CEO of Alibaba Group, said: “This multifaceted partnership will bring Chinese consumers unprecedented access to the world’s leading luxury brands. Chinese consumers are expected to account for nearly half of the global luxury market by 2025, and through this partnership, Alibaba and YNAP will be even better positioned to capture this compelling market opportunity.
“As Chinese consumers continue to upgrade their lifestyles, we want to meet the desires of Alibaba’s more than 600 million users. By integrating online and offline commerce through our New Retail technologies, we will be able to deliver a seamless experience to consumers as well as better enable these leading brands to engage their customers in new and innovative ways. 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 financial terms of the deal were not disclosed, both Richemont and Alibaba said during a conference call early Friday. Michael Evans, board director and president at Alibaba, said the investment costs in the creating the apps and stores were “relatively small” compared with the opportunities that YNAP will have in China once the fashion e-commerce player is fully integrated into the Chinese platform.
Asked whether he’d be spending Richemont’s multibillion-euro cash pile on the deal, Rupert demurred, saying he was investing far less than the company’s $6 billion on the Alibaba JV. “We’ve always liked cash and the security blanket of liquidity,” he said.
This story was reported by WWD and originally appeared on WWD.com.