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Alibaba’s making an opportunistic investment in Dufry

October 5, 2020, 2:39 PM UTC

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On Monday, the hospitality and tech sectors saw a marriage, highlighting how the former may not ever be the same again due to COVID-19.

Chinese tech titan Alibaba announced plans to acquire up to a 10% stake in Dufry, a Swiss duty free group that has struggled with the effects of global lockdowns. They’re forming a joint venture that will focus on expansion in the Middle Kingdom.

The partnership will help the two “explore and invest in opportunities in China” while bolstering “Dufry’s digital transformation,” according to a statement from Dufry.

It’s a tie-up that makes sense not only because of the e-commerce line—but also because appetite for duty-free spending appears to continue in China, pandemic or not.

In China, travel stocks have soared as domestic travel has resumed with coronavirus rates within the country remaining low. In the hopes of reviving spending, Chinese authorities in June relaxed rules on domestic duty-free spending. Travelers to Hainan, dubbed the Hawaii of China, can now spend three times more on duty-free items than previously allowed.

And when it comes to luxury goods—a staple of duty-free shopping—retailers are now doubling down on China as mainland tourists forgo Paris and Milan for closer-to-home abodes. China is “the only major economy expected to show growth this year” in the luxury market, per Reuters.

Dufry also plans to buy out its Hudson unit via a new rights issue. While it previously hoped to raise about 500 million Swiss francs through the process, it now hopes for about 700 million Swiss francs ($763 million) with the Alibaba commitment. Advent International, the private equity firm, is also expected to invest in the rights issue.

AIRBNB’S IPO? The home-sharing startup is reportedly seeking to raise $3 billion at a valuation of $30 billion. It’s surprising, considering the pandemic took that number from $31 billion to $18 billion at one point in private rounds. Airbnb reportedly is seeking to release its IPO filing in November after the election and target a listing sometime in December. Read more.

Lucinda Shen
Twitter: @shenlucinda


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