Richemont, which recently acquired Yoox Net-A-Porter (YNAP), has signed a joint venture with Alibaba to offer luxury brands on a new e-commerce website of Alibaba, the Tmall Luxury Pavilion. Mobile apps will be launched in China for YNAP's Mr. Porter and Net-A-Porter websites with Alibaba's technology, logistics, payment and marketing support. About 950 luxury brands are currently sold in China via YNAP.
Another big luxury goods group, Kering, has already been working with Alibaba's main rival, JD.com, in the Chinese online marketplace. On the other hand, it has decided to end its 7-year-old joint venture with YNAP for its e-commerce, and to bring it in-house from the first half of 2020. It has also indicated its intention to launch a small app on WeChat for better communication with its Chinese clients, while working with Apple for the rest of the world.
Online sales represented 6 percent of Kering's turnover in the first half of this year, but they are growing at very high double-digit rates for all its brands, including Gucci and Yves Saint Laurent. The decision to bring e-commerce in-house was announced a few days ago by Grégory Boutté, who was appointed as the group's chief client and digital officer one year ago.
Richemont's move is apparently intended to fend off online offers of counterfeit products to Chinese customers, who have come to represent a big and growing portion of the global luxury goods market.
The internet currently represents only an estimated 9 percent of the global luxury goods market, but its share is projected to reach 25 percent by 2025, according to Bain & Co., with Millennial and Generation Z customers representing 85 percent of the growth of the market last year.