Global Brands Group Holding Ltd. is in 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.
The 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 cooperations offline, Chief Executive Officer Bruce Rockowitz said in an interview Wednesday. The executive hopes to make an announcement of a deal within this year, he said.
“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.”
Global Brands’ plan could help it make inroads into a market where e-commerce transactions are projected by the Chinese government to reach 18 trillion yuan ($2.8 trillion) this year. Rockowitz’s comments come after Alibaba said it will spend 28.3 billion yuan to buy 19.99 percent of Suning Commerce Group Ltd., China’s largest listed electronics retailer.
Alibaba and JD.com “want to do something. They don’t have the content, just platforms, but they want to go to the next level,” Rockowitz said.
Alibaba confirmed it’s in 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.
JD.com declined to comment on Rockowitz’s remarks, saying the company is in ongoing talks regularly with many brands.
Global Brands, which was spun off from sourcing company Li & Fung Ltd. last year, rose 3.6 percent to HK$1.75 by the close of trading in Hong Kong, its highest level since July 30. Li & Fung gained 2.8 percent, while the city’s Hang Seng Index dropped 2.4 percent.
Global Brands has more than 350 brands that it owns, designs and licenses, including characters from blockbuster movies by Walt Disney Co. such as “Frozen.” It also set up a joint venture to develop David Beckham-branded consumer products globally.
The Hong Kong-based company aims to reach $1.5 billion sales in five years for the venture with the former British soccer player and plans to sell his products across China, the U.S. and Europe. Further development of the deal will be announced “soon,” Rockowitz said.
The company will focus on acquisitions in Europe and new categories that it currently lacks such as denim, the executive said.
Global Brands reported on Tuesday first-half net loss narrowed to $35 million from $98 million a year earlier.