Net-a-Porter is leaving China as its joint venture with Alibaba ends

On June 14, it was reported that luxury online retailer Net-a-Porter would be leaving China. The news comes just six years after the announcement of a joint venture between YOOX Net-a-Porter Group (YNAP) and Alibaba, led by Feng Mao. Wu Yating, CEO of Feng Mao, announced to employees that the company would soon dissolve.

Many fashion brands on the platform have also received notice from Net-a-Porter that their Chinese business is at risk of liquidation. The platform will stop ordering goods from SS25, but the online service will continue until March next year. Net-a-Porter and its menswear platform Mr Porter entered China through Alibaba’s luxury pavilion in 2019 and are operated by Feng Mao.

In December last year, YNAP’s owner, Richemont, terminated the sale of a 47.5% stake in the platform to its main competitor Farfetch. Farfetch narrowly escaped administration last year after being acquired by South Korean e-commerce giant Coupang. Alibaba and Richemont formed a global strategic partnership in November 2020 and each has invested US$250 million in Farfetch and each holds a 25% stake in the new joint venture operating Farfetch in China.

Currently, the luxury e-commerce sector is in a turbulent situation. Richemont has classified YNAP as “ceased operations” and said it had made progress in sales after sales on the platform declined 14% in fiscal 2024. Meanwhile, competitor Farfetch continues to suffer post-acquisition losses, causing parent company Coupang’s net profit to drop from $91 million to $5 million in the first quarter of 2024. Matches entered administration just three months after being purchased by Frasers Group in December. Mytheresa, however, performed well, with its net profit increasing from EUR 1.4 million (USD 1.50 million) to EUR 4.1 million (USD 4.38 million).

After a boom during the pandemic, a major concern is how luxury e-commerce platforms can deliver luxury experiences while competing with brick-and-mortar stores and brand websites. Platforms are upping their game with technology and community building to deliver experience and “emotional value” to their customers. It is worth seeing what the fight for luxury e-commerce 2.0 will look like.

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