Alibaba Group and Swiss Richemont CFR.S are investing $ 1.1 billion in online store Farfetch and its Asian segment, which is launching in China due to the increased demand for luxury goods. This was reported in a press release received by.
Alibaba will open Farfetch marketplaces on its Tmall Luxury Pavilion and Luxury Soho e-commerce sites, and will also invest in the newly formed Farfetch China with Richemont.
As part of a global partnership, Alibaba Group and Richemont are investing $ 600 million ($ 300 million each) in private convertible bonds of Farfetch Limited. Moreover, the two companies are investing $ 250 million each in a new joint venture, Farfetch China, which will include Farfetch's marketplaces in regions of China.
The Chinese market is expected to account for half of global luxury goods sales by 2025. Luxury goods sales in Asia are recovering rapidly this year following a lockdown caused by the COVID-19 pandemic. The numbers are growing both online and in traditional retail.
So, Versace and LVMH were able to compensate for the decline after the pandemic at the expense of Asian buyers.
The Farfetch platform, whose investors include JD.com and Tencent Holdings Ltd (Alibaba rivals), will have access to Alibaba's 757 million customer profiles. According to the joint press release, Artemis, the controlling shareholder of the Kering group, also intends to increase its stake in Farfetch.>