U.S. apparel retailer Gap Inc. has sold its Greater China business to local e-commerce company Baozun Inc., both companies confirmed via separate statements on November 8.
China’s Baozun said its unit White Horse Hong Kong Holding Limited would acquire Gap Shanghai Commercial and Gap Taiwan Ltd, which operate the whole business of Gap Greater China, with a primary deal size of USD 40 million and no more than USD 50 million for adjustment.
The Gap Greater China business will form part of Baozun Brand Management (BBM), a unit of the e-commerce solutions provider designed “to leverage (the company’s) dominant portfolio of technologies at the service of brands, and to engage in longer and deeper relationships with brands,” said Baozun in a press release.
“This acquisition accelerates our evolution into a technology-driven, omni-channel commerce player. Technology is at the center of our strategy, and it is our competitive advantage,” said Vincent Qiu, chairman and chief executive officer of Baozun.
“With Gap’s brand equity and significant size in Greater China, BBM will start at a higher point to bridge the digital commerce/brick-and-mortar divide at scale and do what few have done in retail.”
Gap has also granted Baozun the right to manufacture, market, distribute and sell Gap products in Greater China with local creation capabilities on an exclusive basis.
The duration of the business arrangement totals 20 years, with an initial term of 10 years that can be renewed twice with each renewal of a five-year term.
“As a leading brand e-commerce solution provider and digital commerce enabler in China and a trusted partner of ours since 2018, Baozun has supported the expansion of our Gap Greater China online business,” said Gap Inc.
“With its local expertise and best-in-class omni-channel technology and deep expertise in data management and digital business, Baozun will enable Gap brand to better connect with Chinese consumers across all channels.”
Since its first China store in 2010, Gap Greater China has achieved robust expansion throughout Greater China, amassing close to 30 million loyal members in the region.