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Alibaba Group Holding Ltd (NYSE:BABA) said in a statement Friday that the fashion brand Gucci — owned by Kering SA (OTC:PPRUF) — would be launching two flagship brands on its luxury e-commerce platform.
What Happened: Gucci's line would be available on Alibaba’s Tmall Luxury Pavillion, where the Jack Ma-led company said it has managed to gather high-end luxury goods companies that were previously skeptical of online retail.
Gucci’s first store would open on Dec. 21 and the second which will focus on beauty products is set to launch in Feb. 2021.
“We’ve strived to help brands engage Chinese consumers via our digital tools and solutions, from product marketing and brand-building to market analytics and customer service,” said Luna Wang, head of Tmall Luxury Division.
Wang said that China’s Gen Z has grown up with “the world’s information at its fingertips and entered the world of luxury at a very early age.”
The executive laid stress on the importance of luxury brands resonating with such consumers.
Why It Matters: Alibaba says the platform has nearly 200 leading luxury and designer brands and it has managed to add 50 since the pandemic began this year.
Tmall Luxury Pavillion hopes to increase the number of brands to 220 by the end of the year. Recent entrants include Balmain, Salvatore Ferragamo, Golden Goose, De Beers, Jaeger-LeCoultre, and IWC Schaffhausen.
Luxury consumption in China is expected to increase by 48% to nearly $53 billion (RMB 346 billion), according to a Bain & Company report.
See Also: Alibaba, JD Say US Was Top Seller In Their $116B Singles Day Shopping Extravaganza
China is set to emerge as the largest consumer of luxury goods ahead of Europe and America by 2025, the report says.
Price Action: Alibaba shares closed nearly 1% higher at $264.43 on Thursday in New York. On the same day, Kering OTC shares closed 1.18% higher at $693.03.
