Richemont, the owner of Cartier, is reportedly teaming up with Alibaba to try to make inroads into China's eCommerce market, in which it has struggled to drive sales.
According to a report in Reuters, Richemont-owned YNAP and Alibaba, China’s biggest eCommerce player, will launch mobile apps in the country for the multi-brand NET-A-PORTER store and men’s fashion specialist MR PORTER under a joint venture.
This is an important partnership for Richemont, since Chinese consumers account for a third of luxury goods purchases around the globe. While many are purchasing high-end products while traveling overseas, Chinese shoppers are increasingly spending locally.
“Quite frankly, there’s not a luxury goods group in the world that can catch up with where Alibaba is at in terms of so many of its ecosystems,” Richemont Chairman Johann Rupert told journalists, according to Reuters. “It’s sad that all the luxury goods groups are finding themselves with a prisoner’s dilemma, where everybody is fighting each other when we’re entering a place, a market as vast as China, [where] we simply don’t have the tools.”
Farfetch, the fashion retailer, got an investment close to $400 million from China's JD.com last year to help the retailer increase its reach in the market. The two also inked a partnership. Rupert said during the press conference that Richemont thinks the deal will boost sales in the medium term, but didn't provide any more details.
In January, Richemont, which is a holding company for YOOX NET-A-PORTER, made an offer to buy the shares of the company it didn't already own. Richemont — which entered into an agreement with Italy’s YOOX Group to merge with NET-A-PORTER in an all-shares deal in 2015 — was seeking nearly 50 percent of the company at €38 per share at the time.