Luxury retailer Farfetch is trialling an online flagship store on Alibaba’s Tmall, following the shutdown of its store on JD.com on December 31, Chinese media outlet Dianshang Zaixian reported on Wednesday. The move is part of a deal the company signed in November with Alibaba and Richemont, the owner of the Maisons brand.
For brands, the Farfetch-Alibaba deal means access to one of the world’s largest stores and its 779 million consumers — a drastic change for many that did not have an e-commerce presence in the country to begin with. (Because China has strict laws about how foreign businesses operate and sometimes requires them to partner with an existing Chinese business, the barrier to entry is often too high.) Now, however, even small brands get to swim with the big fishes and profit off China’s insatiable luxury appetite. Senreve, which already had a Tmall platform outside of Farfetch, has seen growth in China surge 10 times year-over-year with its online and offline operations.
For Chinese consumers, it means access to Farfetch's extensive range of brands, and for Farfetch, it means access to Tmall's 500 million plus customers. Some forecasters predict that Farfetch's active shoppers could reach as high as 30 million in the next five years with their recent expansion to China.
Farfetch claims to be the No. 1 global online luxury fashion platform with more than 1,200 sellers and 2.5 million active consumers at the end of June 2020. Its gross merchandise value reached USD 2.1 billion in 2019.
Currently, Tmall Global aims to offer a range of operational solutions to help overseas merchants find the most suitable business model for reaching Chinese consumers.
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