China's Alibaba continues shopping spree with investment in flash sales platform

PUBLISHED : Wednesday, 08 July, 2015, 2:14pm
UPDATED : Wednesday, 08 July, 2015, 3:04pm

China’s top e-commerce player Alibaba Group said on Wednesday it has made a major strategic investment in, China's leading flash sales platform for luxury and fashion products. will integrate with Alibaba's business-to-consumer platform Tmall, forming a specialised service team to grow the flash sales service, Alibaba said in a release. 

"We hope that will exert its advantages to create synergy with Tmall in providing more premium luxury goods to consumers," said Alibaba’s chief executive Daniel Zhang. 

The company saw a "significant opportunity to provide enhanced shopping experience for Chinese customers" through a partnership with Tmall, said Thibault Villet, founder and chief executive of parent Glamour Sales.

The size of the investment was not disclosed. Alibaba also declined to reveal the size of the stake it will take in the smaller company. 

Flash sales – where brand name goods are sold at steep discounts for limited periods – have proved hugely popular in mainland China. 

Smartphone maker Xiaomi, in particular, has taken advantage of this trend to generate buzz and impressive sales figures for its products. 

In April, it said it had sold more than 2 million smartphones in a 12-hour flash sale held to celebrate its fifth anniversary, bringing in US$335 million in revenue. 

Founded in Shanghai in 2009, Glamour Sales has brought the flash sales model to the luxury goods market. 

It has over 6 million customers in China in around 1,200 cities, mainly second- or third-tier locations, where luxury goods shops are less common. 

The company said its revenue for 2014 was around US$155 million, up from US$82 million the year before.

“Many Chinese consumers travel from the mainland to Hong Kong or the US and Europe to purchase luxury goods, where prices are typically lower, but they are also increasingly turning to the internet in search of better deals,” Villet told the Institutional Investor magazine last year. 

Prior to the Alibaba investment, Glamour Sales had raised around US$100 million in funding. 

In April 2014, it landed a US$65 million investment from Hong Kong luxury retailer Chow Tai Fook and London-based asset management firm Investec. 

This came after the departure of investor Nieman Marcus Group, which had paid US$28 million for a 44 per cent stake in the company in 2012.