Burberry share price: Retailer taps into China’s e-commerce market

Burberry (LON:BRBY) has launched a virtual storefront on Alibaba Group Holding’s Tmall shopping site, as it looks to tap into China’s fast-growing e-commerce market and gain better control of its brand in the country.

The UK fashion retailer’s online store opened yesterday. Burberry commented in an official statement:

“This innovative collaboration with China’s largest online retail platform, allows Burberry to connect digitally focused consumers to an authentic representation of the brand[…]The new tie-up is a first for any luxury brand and reflects a shared commitment to offering Chinese consumers the best in luxury experiences across all of Alibaba Group’s platforms.”

According to inside sources, cited by the Wall Street Journal, Burberry wants to expand its reach in China, where online shopping is booming. Chinese shoppers bought 1.84 trillion yuan ($295 billion) worth of merchandise online in 2013, which could increase to as much as 4.45 trillion yuan in 2017, estimates data tracker iResearch Global Inc.

The store is also a means for Burberry to gain better control of its own brand in China, people familiar with the matter noted.

Teaming up with Tmall — China’s biggest business to consumer marketplace and one of the three e-commerce sites operated by online giant Alibaba — will give Chinese consumers, who purchase Burberry’s products from the digital store, the assurance that they are buying genuine products.

All Tmall merchants must guarantee the authenticity of their wares before joining the marketplace, which will undoubtedly help the British luxury brand in its struggle against the increasing tide of Asian counterfeit products.

Burberry’s Tmall store is also a big win for Alibaba, which has been courting Western brands ahead of its initial public offering, which is expected to be one of the largest in US history.

Burberry share price on the up

Burberry’ share price has been trading in positive territory so far today and as of 13:07 BST, it was 0.83 percent higher at 1466.00p.

According to AnalystRatingsNetwork data, two research analyst have a ‘sell’ rating on the FTSE 100-listed fashion retailer, 15 have it as a ‘hold’, five rate it as a ‘buy’ and one calls it a ‘strong buy’.

The stock’s consensus rating is ‘hold’ with an average price target of 1,605.81p.