It has recently been reported that Global Brands Group Holding Ltd. is
in possible talks with Alibaba Group Holding Ltd. and JD.com Inc. for a
possible strategic alliance as the company plans to tap the rising online
demand in China.
Is this an example of China creating important
building blocks to dominate the international fashion market?
Global Brands Group (Li & Fung) has been obtaining a
substantial list of international fashion brands. At the same time,
Alibaba has been developing an international network & method for selling
product. Put two and two together, and we see potential international
domination. If you combine Fung Group and Alibaba, you can see
unrivaled resources.
In addition to having a clever and well executed business
strategy, these two Hong Kong/China companies also benefit by gaining financial
benefit from the USA stock market (did you see the size of the Alibaba
IPO?). I would be curious to know how many USA pension plans are
invested in these Hong Kong / Chinese growth companies. It is
interesting to see how the USA is inadvertently (or overtly) supporting China’s
growth on the world stage.
Back to the Potential Strategic
Alliance:
Chief Executive Officer of Global Brands Group, Bruce
Rockowitz said in an interview this past Wednesday that, a deal could involve
online sales of brand-name children’s wear, among other products, through
Alibaba’s Tmall and JD.com, as well as other co-operations offline,. The
executive team hopes to make an announcement of a deal within this
year.
“We are working with JD and Alibaba on a strategic alliance,
joint venture,” Rockowitz said. “It’s a relationship or joint venture together
that can create a solution online, offline and mobile that none of us can do by
ourselves.”
Alibaba confirmed that they have had discussions with Global
Brands for a “potential partnership in bringing authentic and premium
international goods offered to Chinese consumers,” according to the company’s
e-mailed statement (indicated in a Bloomberg
news article from earlier this week). Bloomberg went on to indicated that
JD.com declined to comment on Rockowitz’s remarks, saying the company is in
ongoing talks regularly with many brands.
Li & Fung & Alibaba Forming Partnership with USA
Retailer:
By the way, have you heard about Macy’s
forming a partnership with Fung Retailing Limited a sister company of Global
Brands Group. This Macy’s arrangement is relevant to both Global Brands Group
and to Alibaba. Privately-held Fung Retailing Limited is totally separate from
the publicly-listed company Li & Fung Limited. However, it is our
understanding that they have a corporate relationship. It appears to be a
complicated business structure, they do appear to be related.
Learn more about Global
Brands Group on the Li & Fung page on Apparel Search.
Apparel Search has complete respect for the Fung Group and
Alibaba. It appears to us that both companies are extremely clever and work
well toward long term goals. Being that we are a USA company, we are a bit
jealous and a bit concerned that China is buying up USA developed brands. We
are simply curious how this will all play out over the next few decades. Our
hope is that Hong Kong & China does well, but at the same time we hope it
does not come at the expense of the USA fashion industry. Hopefully we can all
prosper and stay competitive in the market. If China controls the brands, the
manufacturing, and the online retailing, what is left for the USA.
Thank you for taking the time to read our fashion blog post. We hope that you have found this news to be informative. If you have comments or questions, please add your thoughts in the discussion area below.