The Chinese e-commerce group Alibaba has entered into a partnership with the Swiss duty free retailer Dufry that will further integrate online and offline shopping. The parties will form a strategic joint venture in China, and Alibaba will become a minority shareholder in Dufry.
The move is in line with Dufry’s growth strategy, focused on Asian markets. The company is also seeking to expand its digital offerings, including store and staff digitalization, pre- and post-travel online services, digital customer engagement and online presence inside and outside of airports as well as data analytics and digitalization of operations.
“By fostering existing and new business models in offline and online travel retail, we are convinced the joint venture will capitalize on growth opportunities and will support Dufry to become the leading digital travel retail company worldwide,” said Dufry’s chief executive, Julian Diaz.
Dufry counts more than 2,500 shops in 65 countries, while the Alibaba group has more than 800 million customers in China.
Under the deal, Alibaba will obtain a stake of up to 9.99 percent in Dufry by acquiring 25 million shares in the Swiss company’s upcoming capital hike, which has been raised to 700 million Swiss francs (€649m-$756m) from a previously planned 500 million francs (€463m-$547m).
The proceeds will be used by Dufry to buy out for $311 million the minority shareholders in its Hudson unit and delist the company from the New York Stock Exchange as well as for general corporate purposes. The latter may include the setup and operations of the joint venture with Alibaba and the expenses to accelerate the Swiss company’s digital transformation.
The joint venture will be owned at 51 percent by Alibaba and 49 percent by Dufry. Dufry will contribute to the joint venture its existing travel retail business in China and its supply chain and operational skills. Dufry first started to operate travel retail businesses in China in 2008. Today, the company manages duty-paid shops in the Shanghai and Chengdu airports, and its presence extends to Hong Kong and Macau. Alibaba will bring to the venture “its established network in China” and its digital capabilities.
The joint venture will explore growth opportunities and develop the travel retail business in China. “We expect this collaboration to drive growth in Asia and with Chinese customers worldwide with the support of new digital technologies,” Diaz added.