Farfetch will launch luxury shopping channels on Alibaba’s platforms, Tmall Luxury Pavilion and Luxury Soho as well as Alibaba’s cross-border marketplace Tmall Global.
The new channels expand the reach of Farfetch’s global luxury platform to Alibaba’s 757 million consumers, offering luxury brands a multi-brand solution through a single integration with Farfetch.
As part of the global partnership, Alibaba and Richemont will each invest USD 300 million in private convertible notes issued by Farfetch. Alibaba and Richemont will also invest USD 250 million each in Farfetch China, taking a combined 25% stake in a new joint venture that will include Farfetch’s marketplace operations in the China region.
In addition, Alibaba and Richemont have an option to purchase a further combined 24% of Farfetch China after the third year of the joint venture’s formation.
Alibaba and Richemont will also explore additional opportunities to work closely with Farfetch to provide services to luxury brands. The investments by Alibaba and Richemont in Farfetch China and the establishment of the joint venture are expected to be completed during the first half of 2021.
Artémis, the family investment arm of Kering majority owner François-Henri Pinault, has also agreed to increase its existing investment in Farfetch with a USD 50 million purchase of Farfetch’s Class A ordinary shares.
The partners informed that ‘Luxury New Retail’ (LNR) will leverage Farfetch’s and Alibaba’s omnichannel retail technologies to serve the needs of luxury businesses, including a full suite of enterprise solutions powered by Farfetch.
These solutions will serve both mono-brand and multi-brand distribution strategies for luxury brands, including fully connected ecommerce websites and apps, omnichannel retail technology, and access to the Farfetch and Tmall Luxury Pavilion marketplaces via a single integration.
Farfetch and Alibaba have also formed a steering group to further enhance the LNR initiative, which is aimed at leading the digitisation of the global luxury retail industry.
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