Gucci wary of Chinese ecommerce tie-up because of fakes

Gucci, the Italian luxury brand, is reluctant to partner with Chinese ecommerce platforms run by Alibaba and JD.com in the world’s largest luxury market because of widespread counterfeiting, its chief executive has said.

“Frankly speaking, on most of the platforms there’s a lot of counterfeiting, and I don’t want to certify counterfeiting because I belong to these platforms,” Marco Bizzarri said on Monday at a dropshipping Business of Fashion conference in Shanghai.

“There’s something wrong with counterfeiting and at this point I want to stay away,” Mr Bizzarri said, adding that he was in contact with both Alibaba and JD.com. “Instead of taking a risk, I wait,” he said. “We are in a situation of wait and see.”

Seeking higher margins and prestige, Alibaba has signed up dozens of luxury brands, including Burberry, Hugo Boss, Tiffany and Moschino to its Tmall Luxury Pavilion platform in the last year, while JD.com has partnered with Kering-owned Saint Laurent and Alexander McQueen, as well as British ecommerce platform Farfetch.

But the Chinese companies have long struggled with a reputation for the rampant selling of counterfeit goods on their platforms. In 2016, the US government put Alibaba’s Taobao platform on its blacklist of “notorious markets” known for peddling fake goods.

Gucci is owned by Kering, the French luxury group, and generated about €6bn of sales last year.

In 2015, Kering sued Alibaba, alleging the ecommerce group encouraged and profited from the sale of counterfeit goods on its platform. But Kering said last year that it would withdraw the lawsuit, and the two companies said in a joint statement they would establish a task force to protect Kering’s brands.

Luxury spending rose 20 per cent in China last year to reach Rmb142bn ($20.5bn), according to consultancy Bain, making it the world’s largest market. Ecommerce represented nine per cent of sales, up from 6 per cent in 2015.

While smaller Italian brands have embraced Chinese ecommerce platforms, the larger French companies have generally been more sceptical. Only a handful of brands owned by luxury house LVMH — notably Spain’s Loewe — sell on Chinese platforms.

Gucci, like LVMH’s Louis Vuitton and the publicly traded Prada, sells its products online in China solely via its own website.

Mr Bizzarri said on Monday that joining an additional ecommerce platform could dilute the sense of exclusivity that is key to luxury brands.

“We have to make sure we maintain this luxury feel, the luxury perception and this kind of exclusivity . . . that is absolutely key for us. We want to make sure [ecommerce] doesn’t impact that,” he said.

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