On October 30th, Ali announced that it has established a joint venture with Yoox Net-A-Porter (hereinafter referred to as “YNAP”), a luxury E-Commerce company of the Richemont Group. Many brands in YNAP will continue to be in the Tmall luxury exclusive. Platform Luxury Pavilion.
According to the “Electronic Business Daily”, the joint venture company will serve women and male consumers in the Chinese market through Net-A-Porter and Mr Porter respectively. Alibaba will provide the joint venture with basic services such as technology, payment, logistics, data selection, consumer insight and many other services and assistance.
According to reports, YNAP is one of the world’s most popular high-end E-Commerce companies, including nearly 1,000 luxury brands, designer brands and beauty brands. In May of this year, YNAP released its first quarter performance report. The report shows that in the three months ended March 31, its sales increased by 0.5% year-on-year to 518 million euros, and sales increased by 7.9% at constant exchange rates. Farfetch, the UK luxury E-Commerce platform, is its strongest competitor.
Interestingly, in June last year, Jingdong Group acquired Farfetch for $400 million. After Farfetch went public in August 2018, it became one of the UK’s most highly valued startups, and Farfetch opened at $27 on the first day of its listing, up 35% from the issue price of $20. The current market value has exceeded $10 billion. For YNAP and Alibaba, it is very stressful, so this cooperation may be mutual win, and Ali will also seize more domestic luxury market share through YNAP’s assists.
In the past two years, the Internet traffic dividend has gradually disappeared. Ali and JD.com have begun to look at the market segments that have not yet been fully explored. Both sides are aiming at the growth space of luxury E-Commerce in China. This time, Ali’s cooperation with YNAP has also intensified the battle for the luxury market that has become increasingly hot.
At present, China is the world’s largest potential consumer market for luxury goods, and it is showing a trend of youthfulness. The “Report on Consumer Digital Behavior in China’s Luxury Markets” jointly published by Boston Consulting and Tencent shows that about 58% of the new generation of luxury consumer goods are young people aged 15-30, who are deeply influenced by digital. Therefore, the consumption path of luxury goods will also show a highly digital trend. In China, Wechat, as the most used social software, has a strong appeal to luxury brands.
According to the Digital IQ Index: Luxury China report released this year by L2, a luxury digital research institute, 92% of the 107 luxury brands currently entering China have opened Wechat accounts, and their data has increased by 87 compared with 2014. %, exploding. Some analysts believe that compared with other platforms, Wechat is the most popular form of communication with the characteristics of circle communication, and luxury brands pay most attention to word-of-mouth communication based on certain circles. If properly operated, Wechat will probably become the most suitable. A new means of media communication for luxury goods. At present, the market pattern of China’s luxury retail industry is still changing.
In the Chinese market, there are two main types of luxury E-Commerce platforms, one is the entry of foreign luxury E-Commerce, and the second is the luxury E-Commerce developed locally. Both have their own characteristics, but overall, the industry has not yet got rid of the “staking” stage of the initial development, and has not yet formed a strong brand. The luxury brands and luxury E-Commerce platforms in the Chinese market must constantly adapt to the needs of consumers and adjust themselves in order to better develop in a growing and competitive market, and get a share of the market.