Alibaba is in advanced talks to invest nearly $300 million (roughly Rs. 2,200 crores) in online luxury fashion retailer Farfetch, the Information reported on Monday, citing people familiar with the matter.
Shares of London-based Farfetch jumped about 16 percent to $32.59 (roughly Rs. 2,400) following the news.
The two companies are also in talks to create a Chinese joint venture, the report said, adding that Cartier-owner Richemont, that has teamed up with Alibaba to create mobile applications, is also considering investing in Farfetch alongside the Chinese e-commerce giant.
Both Farfetch and Alibaba were not immediately available for a comment.
Farfetch, which counts Alibaba’s competitors JD and Tencent among its investors, has been betting on China’s burgeoning online luxury goods world. Chinese consumers make up a third of luxury goods purchases worldwide.
Terms of the current and past deals with Tencent and JD would not prevent Alibaba from investing in Farfetch, the Information said, citing a source.
Earlier last month, Alibaba said it will invest $3.6 billion (roughly Rs. 264,24 crores) to boost its stake in hypermarket operator Sun Art, gaining further ground in China’s retail market.
Alibaba is hoping to further leverage its digital presence to support Sun Art’s 481 hypermarkets and three mid-size supermarkets in China. The move comes as the company steadily expands its presence in China’s offline retail sector, as growth in traditional e-commerce slows. Alibaba is taking the stake from Auchan Retail International SA, the French multinational that launched two of China’s largest supermarket chains.
Alibaba, which already owned 21 percent of Sun Art through a unit, will raise its stake to around 72 percent through the acquisition of a similar stake in A-RT Retail Holdings, who owns 51 percent of Sun Art.
© Thomson Reuters 2020
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