om March next year.  The decision to withdraw from the country by YNAP underscores the challenges luxury multi-brand e-tailers face given the uncertainty in the global economy.  “Much like Farfetch, YNAP struggled to turn a profit in China, even during the Covid years when the luxury market was booming,” Jacques Roizen, MD at consultancy company Digital Luxury Group, told Inside Retail.  “The closure of their China operations likely stems from an inability to sustain further financial losses.” Roizen further explained that the market withdrawal coincides with Alibaba’s strategic shift back to its core business and divestment from many of its historical investments and ventures.  What went wrong? YNAP entered China in 2013 before partnering with the country’s e-commerce giant Alibaba in 2018. Under the joint venture, YNAP and Alibaba launched two mobile apps for YNAP’s Net-A-Porter and Mr Porter multi-brand online stores for consumers in China. Alibaba provided the joint venture with technology infrastructure, marketing, payments, logistics, and other technology support. The partnership also benefited from YNAP’s strong relationship with leading luxury brands, such as The Row, Jil Sander, and Isabel Marant. At that time, some 950 of them were distributed through YNAP in China. Feng Mao struggled to gain traction in the Chinese market as both Alibaba Group’s Tmall and JD.com have established a solid track record in China through their dedicated luxury sub-platforms. “Alibaba’s initial investment in the YNAP joint venture was part of a strategy to boost its luxury credentials, and this strategy worked,” Roizen remarked.  “As soon as Tmall was able to feature YNAP luxury partners on its platform, luxury brands began opening their own stores directly on Tmall, drawn by the promise of greater control over the brand image, customer experience, and pricing, Alibaba’s interest waned. Unfortunately for YNAP, this quickly made their value proposition a lot less relevant in China.” Last month, Alibaba extended its partnership with LVMH to boost the French luxury group’s presence in the world’s second-biggest luxury market. LVMH has around 30 brands on Luxury Pavilion, the high-end site on Alibaba’s Tmall shopping platform, including jewelry houses Chaumet and Tiffany. According to Roizen, both YNAP and Farfetch made a significant mistake when they decided to open stores on traditional Chinese e-commerce platforms, straying from their traditional business model of offering products exclusively on their respective websites and apps.  “As soon as they did that, they had served all the value that they could bring to their respective investors, Tmall and JD,” he said. “Aside from that, I’m sure both platforms made their investments with the expectation that YNAP and Farfetch’s valuations would continue to rise, which turned out not to be true.” Net-A-Porter was founded in 2000 by Natalie Massenet, who joined Farfetch in 2017 as co-chairman. Two other e-tailers, The Outnet for discount designer fashion, and Mr Porter for designer menswear, were added to the Net-A-Porter Group umbrella in 2009 and 2011 respectively.  Yoox purchased Net-A-Porter shares from Richemont and merged with Net-A-Porter to establish the YNAP Group in 2015. In 2018, Richemont acquired the YNAP Group by purchasing 95 per cent of the company’s available shares. The future is grim  Richemont is still on the lookout for a new controlling shareholder for YNAP after the agreements for the sale of a majority stake to Farfetch and Symphony Global fell through last year. The group said it is expected to be in a position to disclose more information about the potential buyers before the end of the year.  “Having separated from Farfetch free of any financial commitments, our maisons and YNAP continue to operate on their own platforms and technology,” Richemont Group said in its FY24 annual report.  The results of YNAP were presented as ‘discontinued operations’.  The first quarter has seen the global luxury sector entering a season of mixed results with stalling demand in China and changing consumer spending preferences.  YNAP’s rival Farfecth, rescued by South Korean e-commerce conglomerate Coupang last year, generated $288 million during the first quarter of the year yet experienced a net loss of $93 million. Italian luxury groups, including Ermenegildo Zegna and Salvatore Ferragamo, reported sales dropping for the period due to the “volatile consumer environment in Greater China”.  The world’s largest luxury group, LVMH, said first-quarter sales in Asia, excluding Japan, were down 6 per cent.