Both companies will invest $300M each in Farfetch Limited and $250M in Farfetch China.
The deal will see both Alibaba and Richemont receive a 25 per cent stake as part of the joint venture, including Farfetch’s marketplace operations in China. In return, Farfetch will accelerate the digitisation of their global luxury industry by utilising each company’s expertise and reach.
Farfetch will launch luxury shopping channels on Alibaba’s Tmall Luxury Pavilion and Luxury Soho Platforms that will give Farfetch access to 757 million customers, an initiative that will assist in Farfetch thriving in a world disrupted by the impacts of the Coronavirus pandemic.
Alibaba Chair and Chief Executive Daniel Zhang, commented: “This highly complementary partnership brings together some of the world’s leading luxury retail and technology platforms, representing another milestone in Alibaba’s strategy to meet the rapidly growing demand for luxury products in China.”
Alibaba and Richemont can choose to purchase a further combined 24 per cent of Farfetch China after the first three years of the joint venture.
