Ladies and gentlemen, thank you for standing by, and welcome to the Farfetch Luxury New Retail Conference Call. At this time, all participant lines are in a listen-only mode. I would now like to hand the conference over to your speaker today, Alice Ryder, Vice President of Investor Relations. Thank you. Please go ahead.
Thank you. Hello, and welcome to Farfetch's Luxury New Retail Conference Call. Before we begin, we would like to remind you that our discussions today will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to publicly update or revise them. For a discussion of some of the important risk factors that could cause actual results to differ, please see the Risk Factors section of our Form 20-F filed with the SEC on March 11, 2020, and in Exhibit 99.2 to our Form 6-K filed with the SEC on April 27th, 2020.
I also want to remind everyone that we will be speaking to you again next Thursday, November 12th, when we publish our Q3 results, and as such, will not be discussing our Q3 performance on this call. Now I'd like to turn the call over to José Neves, our Founder, Chairman, and Chief Executive Officer.
Thank you, Alice. Hello, everyone, and thank you for joining us today. With me this morning is Elliot Jordan, Farfetch's Chief Financial Officer, and Judy Liu, Managing Director of Greater China. Together, we will talk you through the strategic global partnership with Alibaba and Richemont announced last night. I will outline the strategic rationale for the partnership. Judy will talk in a bit more detail about what this means for our business in China. Elliot will explain the terms of the deal and its financial impact on the business. We will take as many of your questions as we can. Our mission is to be the global platform for the luxury industry. I'm excited to discuss yesterday's announcement, which will accelerate our ability to deliver on this vision. To begin, there are three key parts to the announcement.
First, a global partnership to digitize the global luxury industry, which we call Luxury New Retail. Second, a new joint venture for China, constitutes a step change in our China strategy. Third, underpinning the two strategic initiatives above, a combined total $1.15 billion investment in Farfetch from Alibaba, Richemont, and Artemis. Let me briefly say something about each of these. First, the partnership we announced yesterday is a global partnership which extends beyond China. I want to make it clear that it is not a new strategy for Farfetch, but it is indeed an acceleration of our strategy that has been long in the making. When I first met Daniel Zhang, we spent a long time talking about how we saw the world. It was one of the most memorable meetings of my life.
We immediately clicked and realized that our two companies had a lot of commonality in our vision of the future. Three things were clear to both of us. First, we were both technology platforms, not retailers. Our thinking is driven by innovation, going beyond being just marketplaces. We see ourselves as enablers for entire industries to thrive. Second, we both believe that we are not in war with physical retail. On the contrary, the biggest opportunity for Alibaba and Farfetch is to enable the revolution of physical retail as innovation partners to the world's best brands and retailers. Jack Ma coined this as new retail in 2016. That same year of 2016, Farfetch invited 250 C-levels from the luxury industry to an event called FarfetchOS. There, I laid out our vision. We coined it Augmented Retail.
What clicked in my meeting with Daniel is that we both saw that the biggest opportunity for the next 10 years in luxury is powering the convergence of physical and digital retail. This is what we have decided to coin as Luxury New Retail. Third, both companies know what it takes to win in online luxury in China. We both successfully launched luxury marketplaces that we believe are leading the online luxury paradigm shift in China. With our models, luxury brands connect directly to Chinese customers via our marketplaces in a model that benefits everyone, brands and consumers with strong network effects. It was clear after that meeting that we had in front of us not just the opportunity to create a winning online luxury alliance in China, but to go even beyond and power the global digitization of luxury.
Naturally, conversations extended to Richemont, who have a very successful partnership with Alibaba in China. It became clear that this was not only a technology, but a movement that the leading Luxury Maisons would enthusiastically endorse, and one that we, of course, want in the future to expand the strategy to all other luxury groups, as well as smaller designers and luxury retailers alike. I was very honored to spend many hours with Johann Rupert and learn from him, not just about luxury excellence, but also about his own vision. No one in luxury has been bolder and more visionary than Johann, who early on saw the online opportunity and invested unwaveringly in this vision, eventually building YNAP, who together with Farfetch, lead as multi-brand online luxury destinations globally.
Johann, Daniel, François-Henri, and myself all share this vision of complete convergence of physical and digital technologies that we call Luxury New Retail, and we also share a sense of urgency. In a COVID-19 and even post-COVID-19 world, to have global omni-channel capabilities extending to China will be vital for all luxury brands and retailers. The future needs to materialize now. Let me be crystal clear. Luxury New Retail is not only a strategy. It is a suite of products and technologies powered by Farfetch that we spent five years building and is ready to go to market. Following the FarfetchOS event in 2016, we announced an exclusive partnership with Chanel, and we launched the first Store of the Future at Chanel's global flagship store in Rue Cambon in Paris in June 2019.
This launch was extraordinarily successful, and we are working on rolling out to other Chanel boutiques. In September, our Chanel exclusivity lapsed, which means we now advance to the next stage of Store of the Future. By the end of the year, we will launch version 2 of Store of the Future with the relocation of 50-year-old Browns iconic boutique in London, where we will showcase the latest advances we've made in connecting physical retail to digital platforms. Luxury New Retail, therefore, combines Farfetch's leading suite of platform products and technologies, including the Farfetch Marketplace, Farfetch Platform Solutions capabilities, and Store of the Future with the leading-edge expertise Alibaba possesses in the areas of omni-channel and in-store technologies.
The Luxury New Retail vision is to enable leading luxury brands with one single partner and integration to achieve a global omni-channel presence via their own mono-brand destination, connected retail stores, and presence in the world's largest online luxury destinations, Farfetch Marketplace, and Tmall Luxury Pavilion. Let's move now to the China element of our partnership announced today. China was already the most strategic market for luxury before COVID-19. Chinese consumers represented 35% of luxury in 2019 and were expected to represent half by 2025. With COVID-19, this is accelerating. Not only that, 70% of Chinese consumption in 2019 was done while traveling, representing a staggering $70 billion in luxury purchases.
With COVID-19 and the collapse of international travel, we're seeing a repatriation of this demand. We believe that digital channels will take the lion's share of this $70 billion latent demand, given how vast China is and how underdeveloped the physical store networks are in China for most luxury brands. Today, Farfetch step changes its already incredibly successful China strategy by partnering with Alibaba's Tmall and creating a new joint venture with Alibaba and Richemont for the Chinese market. We will launch on Tmall Luxury Pavilion and Luxury Soho, China's premier luxury and luxury outlet destinations within the Tmall marketplace. As well as Alibaba's cross-border marketplace, Tmall Global. The new channels expand the reach of Farfetch's global luxury platform. Luxury labels will be able to elevate their brand awareness while also significantly expanding their addressable market of luxury consumers through their participation on Farfetch's global marketplace.
I will let Judy walk you through what this means for our China strategy and also what's in it for the Chinese consumer. Finally, the third element of today's announcement is the $1.15 billion combined investment that underpins the strategic initiatives, both globally and in China, which Elliot will walk you through. We know it's a lot to be announcing in one go, but this is a major step in our mission to connect the curators, creators, and consumers of the luxury fashion industry. Farfetch's strategy has always been to be the global platform for the luxury industry. We are offering a transformative vision for the industry at a time when so much has changed because of lockdowns and the collapse in international travel. Now I'd like to hand over to Judy Liu, our Managing Director of Greater China. Judy?
Thank you, José. Hi, everyone. I'm pleased to be with you today and to give you a clear view about Farfetch in China. Before starting, please let me share a bit of my background. I'm a Chinese entrepreneur with more than 15 years of experience in the internet and luxury industries. In 2011, I was the vice president of the joint venture between the U.S. company Groupon and Tencent. During that time, I successfully launched the business across China, overseeing the opening of 14 physical offices in just six months and leading to the IPO. I had the chance to observe the creation and growth of WeChat and saw the massive opportunity in the online luxury industry, that's why I founded CuriosityChina, which quickly became a market leader in digital marketing and tech solutions for luxury brands.
I was actually already an early-stage customer of Farfetch, and in 2018 I had a chance to have a close look at the Farfetch business and met with José and the management team. I was impressed and even more excited of the potential of Farfetch in China. Following the acquisition of Curiosity , I then became the Management Director for this key market. Today, we have a very successful business in China. Farfetch entered China in 2015. We have five years of experience operating in the market. The Farfetch China team has more than 450 members and top management with strong local market expertise. We are one of the few Western e-commerce companies who are succeeding in China. This is evidenced by the fact that China is Farfetch's second-largest market and is continuing to be the growth driver of our global business.
The key drivers of our success in China are our ability to attract valuable customers and the bespoke and engaging experience we deliver for them. Let me share what makes our customers so valuable. First, they are young. Around five years younger than the average compared to our other markets. As we always say in the industry, whoever owns the young generation in luxury owns the future. These young customers in China also have really high spending power. Our average order value is around $720. That's 30% more than the average global Farfetch customer. Around one of the third of the China GMV comes from our private client. These customers are really sticky too. Our private client customers typically visit us more than once a day, and they order nearly once a week.
Part of the reason they come to us is that we make it very easy to do so. China is a mobile-obsessed society. Today, around 75% of our China region GMV comes from mobile, and China mainland is even higher, and the shares have continued to grow strongly, much higher than our global average, which is about 50%. Of course, we are driving growth in many ways. What I want to share with you here are some of the most important ones. First, Farfetch has real expertise in global performance marketing. For China, we have built a full-scale demand generation team on the ground and a whole local strategy with a focus on mobile. For us, the KPIs that matter are based on app downloads and lifetime value rather than short-term return by paid search.
Our high-end customers come to us because we deliver a localized luxury experience. We have enabled really easy access for these mobile-obsessed customers with a dedicated app that helped us to provide a bespoke experience. This really differentiates us from our competition. We are the first Western company in our industry to build a dedicated China app with local product experience and a full local infrastructure. We have recently just launched our brand new iOS 2.0 and Android apps designed to be truly localized for the Chinese customer. Our localized user experience is more than just mobile. It's also about providing seamless operation service by integration. We provide multi-channels pre- and after-sales support, and we do that with real specialists in fashion. These are people we have trained with real fashion and product knowledge. That's another real differentiator. Additionally, border custom in China are extremely complicated.
What we have built allows us to provide stable service and smooth delivery to our customers. Our average delivery lead time is two to three days to Hong Kong and four to six days from around the world to Mainland China. The mechanism for doing this is super complicated and hard to replicate. The result for our customer is super simple and reliable. Finally, we provide a fabulous private client service, and we are doing it at scale in China. In combination, these very user-friendly elements really show we do things differently and better. The Farfetch China Ecosystem going forward. Farfetch, since its entrance to China market in 2015, has successfully navigated the Chinese e-commerce environment with our unique advantage and established our own full coverage ecosystem, to serve both luxury customers and our brand partners. Our supply advantage differentiates Farfetch in China.
We offer Chinese customers access to more than 430K SKUs across over 3,500 brands from sellers located in more than 50 countries. This creates unique attractiveness to Chinese customers by providing them the access to the latest global fashion that are not immediately available in local markets. Our ecosystem in China empowers Farfetch to be the preferred strategic partner for brands to establish online distribution in China, both on transaction channels and the demand generation capability to catch the world's largest luxury customers. Brands who adopt the Farfetch Marketplace e-concession have access to Farfetch China apps, farfetch.cn, and all Farfetch social commerce channels. Our alliance with Tencent and ongoing partnership on WeChat creates exciting and powerful social commerce presence for luxury brands.
Farfetch China's full coverage ecosystem can also help our brand partners to leverage all key media channels to engage with luxury customers wherever they are, including Baidu, Little Red Book, and TikTok. Today, we are very excited to introduce an important new element to Farfetch's ecosystem. Farfetch will be launching on Tmall Luxury Pavilion and establish an exclusive presence as the only multi-brand player in Lux Soho , Tmall's luxury outlet destination. With this partnership, we will boost our exposure to include the 757 million customers across the Alibaba Group. Now, through a single integration on Farfetch, brands will have access to both Farfetch and Tmall, the two strongest luxury platforms in China. This makes Farfetch the most compelling platform for luxury brands looking to boost their presence in China.
As José mentioned, we will also partner with Alibaba Group on new retail development in the luxury industry and hopefully leverage China as a pilot market. By this stage, I hope I have given you a good understanding of why we are still well-positioned in this massive market. Now, I would like to turn the call over to Elliot.
Thanks, Judy. Hello, everyone. I'd now like to take you through the financial aspects of the deal, investments that underpin the strategy and, we believe, create strong alignment across these new strategic partnerships. There are three aspects that in total inject $1.15 billion into Farfetch. First, the sale and issue of Farfetch-limited convertible notes totaling $600 million, $300 million each to Alibaba and Richemont. The issue of 1.9 million new Farfetch shares to Artemis for $50 million. Thirdly, an investment by Alibaba and Richemont of $250 million each into a newly formed subsidiary in China that will operate the Farfetch China marketplace. The top co-investment by each party aligns to the advancement of Luxury New Retail, which will be powered by the Farfetch Platform globally.
The investment by Alibaba and Richemont at this level reflects the expectations that Farfetch will continue to drive a market-leading position globally, as a Marketplace and platform for the luxury industry. You will recall that Artemis invested at the IPO, and this additional investment today demonstrates their continued belief in the future of Farfetch. The creation of a new subsidiary that operates the Farfetch Marketplace in China, with part-ownership by Alibaba and Richemont of this entity, will ensure strong financial alignment to the success of the Farfetch Marketplace as the premier multi-brand luxury destination in China. With each investment of $250 million, we will transfer 12.5% of this entity to Alibaba and to Richemont, with Farfetch retaining a majority 75% holding. This investment values the Farfetch China Marketplace today at $2 billion.
To be clear, the new entity will utilize the global Farfetch platform to deliver sales across all Farfetch Marketplace consumer channels in the People's Republic of China, the Hong Kong Special Administrative Region, the Macau Special Administrative Region, and Taiwan. The marketplace channels are the Farfetch app, farfetch.cn, and WeChat, and moving forward, the Luxury Pavilion and Lux Soho. The China entity will not hold other aspects of the Farfetch platform, including CuriosityChina, Stadium Goods, Browns, Farfetch Platform Solutions, Store of the Future, the brand platform New Guards Group, Luxury New Retail, or our global marketplaces. These elements stay within the Farfetch Group outside the new JV. Farfetch is set to become synonymous with luxury in China, and as Judy has been saying, we will work hard with these new partners to ensure we build a market-leading position. The financial terms are as follows.
First, $600 million of 0% convertible notes due in 2030 at an initial conversion price of $32.29, which represents a 22% premium to the 30-day VWAP as at 30th of October 2020. The second aspect, the $50 million to Artemis for 1.9 million Class A shares at a price of $26.46 each, being the 30-day VWAP as at October 30th, 2020. The investment in the JV, the $500 million split equally between Alibaba and Richemont for a combined 25% stake in Farfetch China, with an option to increase the holding from 12.5% each to 24.5% each if certain financial targets are met in three years from completion. The additional investment will be at the fair market value at the time, and Farfetch will continue to retain control and fully consolidate this entity. This provides the $1.15 billion total investment in Farfetch.
Turning to next steps, following the announcement yesterday, we will be reorganizing the legal entity structure in the region, creating the China business as described, and launching the new channels as part of this partnership. This is expected to complete during 2021, with financial impact from 2022. This means we are not expecting this transaction to materially alter our financial forecast in 2021. Our previously stated goals remain in place, and I will update on progress towards those goals once we announce our Q3 2020 results next week.
These new partnerships and new marketplace channels will become core to our longer-term goals, which are growing ahead of the overall online luxury market, creating a leading position in all major luxury markets around the world, powering the luxury industry for all parties, the luxury brands, retailers, and of course, consumers, and lastly, growing our China business to become the largest market for demand across the Farfetch Marketplace. No material change to numbers for 2021, but as usual, we will include the financial impacts of new initiatives in our quarterly guidance moving forward. I'd now like to turn the call back over to José for some final remarks and your questions. José.
Thank you, Elliot, and thank you to everyone for your attention today. In summary, I hope you agree with us that this partnership is a massive validation of our position as the global platform for luxury. Leveraging each company's respective expertise and extensive reach, the partnership will bring luxury retail to the next generation by seamlessly integrating the digital and physical realms. Our strategy has always been, and will continue to be, to become the global platform for luxury. Today, we step change and accelerate that same strategy. Integrate all of the investments and suite of products we developed over the last 13 years into one single vision for the luxury industry, which we call Luxury New Retail. With that, let's turn to your questions. Alice?
Thanks, José. Your first question, maybe José, you can take this one, comes from Louise Singlehurst of Goldman Sachs. She would be interested in knowing what the opportunities are for Farfetch Platform Solutions, formerly known as Black & White.
Thank you. It's a great question. I think this further differentiates what was already a strong USP of Farfetch Platform Solutions. Farfetch Platform Solutions, as you know, powers the brands or the retailers' own websites, apps, but also includes the Store of the Future suite of products. It also will power, now that the Chanel exclusivity has lapsed, the integration with deep retail tech, which we're very, very excited about. I think what this partnership does is further differentiate Farfetch Platform Solutions. I'm really positive and confident that this will attract more brands and more department stores to FPS. We will continue to advance that business unit as well.
Thanks, José. José, Oliver Chen from Cowen has a question about our existing vendor relationships and would like to know what's ahead in terms of maintaining those, and what does this mean for our current suppliers?
First of all, we have an incredible, and very, very close relationship with 550 brands who directly sell to consumers via our marketplace. We have relationships with almost all the large luxury groups in the industry. Very excited that today, this now includes Richemont, who was one of the very few groups that we did not offer any services. As Johann shared, we will continue conversations to explore ways of working more closely with them. We are in a very, very good position with our brands and our vendors. We have 100% retention in terms of our top 100 brands, which speaks of our service levels and the value that we bring to the partnerships.
I think, this partnership reinforces all of that and for all the participants in the Farfetch Marketplace, what this means is that they now have, with one single integration with Farfetch, they have access to the 757 million customers that shop regularly on Tmall and on Luxury Pavilion. Let's not forget that to establish e-commerce operations in China is very difficult. It's expensive. Creating specific inventory to be held in China by a third party, the TP model, which is until now what brands had available to them before this partnership, is risky because you are producing inventory that will be shipped to China and will be specific for the Chinese market.
What this does for our brands, regardless of whether they are already on Tmall Luxury Pavilion, or not yet in China at all, it allows their global inventory to be available to these Chinese luxury shoppers. That is extremely powerful for the vendors, for the brands. I've received numerous messages from brands, from large luxury groups as well as smaller designers, which is really encouraging.
Terrific. Maybe Elliot, let's turn over to you, and, if you don't mind, I'd like to just combine two questions that we've received. One from Lloyd Walmsley of Deutsche Bank, who's curious about the unit economics in selling on Alibaba versus our own sites in China. Eric Sheridan from UBS would also be interested in understanding about the economics, and how it works when a customer makes a purchase on Farfetch through Tmall.
Thanks, Alice. Absolutely. Good questions as always from Lloyd and Eric. Particularly as José was just saying, this recognizes the expansion of the Farfetch Marketplace channels in China to now include the 757 million customers that are on the Alibaba platform. As Judy mentioned before, our existing 1,200 sellers from around the world that are currently on the Farfetch Marketplace will soon benefit from connections with significantly more active Chinese consumers. Huge opportunity for those sellers on the platform. The economics and costs associated with GMV on Tmall will be very similar to demand generation costs that we experience on other third-party channels. We will be paying, as we'd expect, cost in relation to the demand generation that we receive on that channel.
That gives us direct sales within the market at market-aligned rates, very competitive rates, and of course, significant brand awareness to a much larger consumer base, being able to drive the Farfetch brand as a luxury destination, not just on Tmall and Lux Soho, but also broadly with the China app and farfetch.cn. Very pleased with that aspect of it. In terms of sort of Eric's part of this, the flows between the entities. Once the JV is set up, the joint venture will benefit from the tech platform that's been developed by Farfetch, as well as the supply from our 1,200 existing partners. That means the JV will pay Farfetch for platform services, for brands and support services, at a rate, again, that has been set between the parties.
The JV, of course, will pay Alibaba for demand generation on Tmall in line with payments and other channels, as I've just mentioned. The JV will effectively act at an arm's length basis across its parent companies. We'll detail more of this once we complete the transaction and once we launch, and how it will impact on your models. Alice.
Terrific. Judy, we have a question that Jason Helfstein from Oppenheimer has about Tmall, and maybe you can help answer this question. The question is, Tmall already hosted more than 400 luxury brands. What is the brand overlap between Tmall and Farfetch? If one brand works with both Tmall and Farfetch, how will it manage its channel?
We sell over 2,500 brands and to have the widest assortments in the industry. It's normal that there is an overlap that with brands, which has a director operator flagship store on Tmall. Nonetheless, that what we bring to Chinese customer is actually international assortments of supply. We will fulfill orders from brand and the boutique store point across 50 countries. As what José just mentioned, brands are selling on Tmall. There's no need to actually allocate the inventory for the Tmall channel, especially.
They can continue to fulfill orders to the Chinese customer from a global stock point. I think that's a fundamental difference. The shops on Luxury Pavilion today, they actually fulfill orders via local inventory only, and this will require brand to allocate inventory to those sales at the beginning of the season. I think today, Farfetch have a lot of experience in running a marketplace and in operations with Tmall. We can leverage our strengths, including demand generation, merchandising, CRM, to benefit the brand.
Thanks, Judy. José, Stephen Ju from Credit Suisse would like to know why are we working now with Alibaba when brands have historically not wanted to deal with Taobao given prior IP issues?
The feedback we have from brands is a very high degree of confidence and comfort around the platform. I think you have proof of this, in the brands that are joining the platform, they are not concerned about these sort of issues. Also, as it's public knowledge, Alibaba is investing massively and is addressing any IP issues on their platform. We are entirely comfortable on that front.
Terrific. José, Doug Anmuth from J.P. Morgan has a question about the partnership and what does that mean for our partnerships with JD and with Tencent? Will we continue to hold our Tier 1 button on the JD platform, for example?
I will start with JD and then I will address the question around Tencent as well. We have, as you know, launched the storefront on JD roughly one year and a half ago. As we have updated quarter after quarter, the markets, it did not ramp up as we expected. Both teams on JD and Farfetch worked very hard to optimize the channel. We now have to make a very simple commercial decision and decision in terms of how to best allocate our capital and our resources. The decision has been made to focus the teams that were running those storefronts on the new storefronts on Tmall. We will be smoothly and orderly be phasing out the storefront on the JD.com app.
This will be done, obviously ensuring that the JD customer continues to have a fantastic experience. This will be done in close coordination with JD so that everything is smooth and orderly and we absolutely protect JD's brand and JD's relationship with their customers. Turning to Tencent, and specifically WeChat. Tencent, as you know, is also a cherished shareholder of Farfetch. On WeChat, we have a very strong presence. We power 90 luxury brands on WeChat, via our CuriosityChina division. We look forward to continue that business and welcome more brands into that ecosystem as well. We will continue to develop that channel. WeChat, for us, is a fantastic, and for all brands in the luxury industry, media channel. A channel that builds traffic, builds brand awareness.
As you would expect, as we receive these brands into our ecosystem, it is important to expose them to where the eyeballs are. Therefore, in terms of the media landscape, we will continue to work with Tencent, WeChat, but also other media partners such as Baidu and Weibo and other key components of the entire Chinese ecosystem.
Thanks, José. Elliot, let's turn back over to you. Geoffroy de Mendez from Bank of America Merrill Lynch is interested in what we plan to do with the proceeds.
Good question. As we've previously reported, Geoffroy, and we are very well capitalized. This transaction wasn't about raising money to support the cash reserves for the near term or for any specific M&A activity. The transaction is about creating formidable partnerships to develop Luxury New Retail and to grow the business in China. Judy outlined the massive opportunity that we see there. That's what this transaction is about, not about the cash. With that in mind, we did want to create very strong financial alignment between all the parties, with a meaningful investment that incentivize all parties to deliver on the goals of the partnership. It had to be a substantial investment from our new partners. The additional capital that we raised today has no specific use.
It will be used over time to support our long-term strategy of delivering a global technology platform for the luxury industry and facilitate our continued focus on executing our growth plans and driving towards operational profitability, as you know, which is set for 2021. It's not about cash, but we do believe this transaction will deliver significant long-term value for our shareholders. Alice.
Thanks, Elliot. José, Sam Lourensz from Arete would like to have a little bit more clarity about how we're going to work alongside Alibaba, what's going to get integrated, while we're also competing with Richemont or YNAP, and whether or not there's any aspirations to merge Farfetch and YNAP offerings down the road.
First, in terms of the partnership with Alibaba, as we announced, we are going to launch storefronts on both the Luxury Pavilion, T Lux Soho, and potentially Tmall Global. That is very, very exciting as it opens this incredible world of fashion that we have on our platform to 757 million customers on the Alibaba platform. Very exciting with that. At the same time, Alibaba is participating in our Luxury New Retail initiative, and that brings tremendous value to the partnership. They have incredible expertise in this field. Things that in the West, we still take as science fiction and we're still relatively far away from materializing. Alibaba has this working on the ground.
If you look at the Hema supermarkets, if you look at how they've integrated tens of thousands of independent retailers to one single digital platform, absolutely boosting not only the efficiency of those retailers, but also the personalization for the customer of the shopping experience. All of these insights are invaluable. We're really excited about this. Finally, Alibaba will also nominate one director to the Farfetch board. We really welcome that experience at the board level. This is not only in terms of Luxury New Retail and omnichannel, but also in terms of technology in general. It's one of, as you know, the most formidable technology companies in the world with really cutting-edge cloud infrastructure and applications on all fronts. This is really exciting and very valuable to us.
In terms of Richemont, as I said before, this is a group that we have no relationships with. We partner with luxury brands in so many different ways. We have the Farfetch Marketplace, we have Farfetch Platform Solutions, we have Store of the Future, we have CuriosityChina. As Johann said today on the call, we just announced the deal.
Now is the time to look at all these services and all the things we can do for the Maisons and how can we work in a more close manner with the group. It's very, very exciting. As you know, we have the Kering Group on the platform with all of their brands. We have relationships with Burberry, relationships with the Prada Group. We have LVMH with several brands on their platform, and we're powering via Farfetch Platform Solutions for other LVMH brands. Richemont was a clear gap in this roster of relationships, and we're very excited about the opening of doors that this deal enables.
Let's take our final question from Eric Sheridan of UBS, José. He would like to understand a little bit about how the brands have reacted and has there been any pushback from them given the Richemont investment?
The brands have reacted enthusiastically. I received so many messages, congratulatory messages from brands both the largest conglomerates, but also smaller designers and smaller retailers. This really is a vision for all, right? For all participants in the luxury industry. We, both with the marketplace, but FPS, Store of the Future, and now the storefronts on Tmall, we really bring more and more value to these relationships with the brands, and that is being recognized by everyone. We're very excited on that front as well.
Terrific. With that, I'll just conclude our call and thank everyone for joining us today. We're looking forward to speaking with you next Thursday when we release our Q3 2020 results. Thanks, everyone.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.