Ecommerce giant Alibaba and luxury goods powerhouse Richemont are to invest in upscale online retailer Farfetch as the trio launch a Chinese partnership.

Alibaba and Richemont will invest $300 million each in Farfetch Limited and $250 million each in Farfetch China.

The deal gives them a combined 25% stake in a new joint venture that includes Farfetch’s marketplace operations in China.

Through the tie-up, Farfetch will launch luxury shopping channels on Alibaba’s Tmall Luxury Pavilion and Luxury Soho platforms, and cross-border marketplace Tmall Global, giving Farfetch access to 757 million consumers.

The deal is also expected to ”accelerate the digitization of the global luxury industry” by “leveraging each company’s respective expertise and reach”.

Alibaba and Richemont have an option to purchase a further combined 24% of Farfetch China after the third year of the joint venture’s formation, and will ”explore additional opportunities to work closely with Farfetch to provide services to luxury brands”.

Separately, investor Artemis is to up its holding in Farfetch with a $50 million share purchase.

Farfetch founder and chief executive José Neves said: “This announcement is a major step in our mission to connect the curators, creators and consumers of the luxury fashion industry. The $1.15 billion investment in Farfetch from Alibaba Group, Richemont, and Artemis is a strong validation of our position as the global platform for luxury.

”The new initiatives extend Farfetch’s strategy to power the digital transformation occurring across the luxury industry, which has been accelerated by the unprecedented challenges resulting from the Covid-19 pandemic.”

Alibaba chair and chief executive Daniel Zhang said: “This highly complementary partnership brings together some of the world’s leading luxury retail and technology platforms, representing another milestone in Alibaba’s strategy to meet the rapidly growing demand for luxury products in China. We will accelerate the digitization of the global luxury retail industry and transform the luxury shopping experience for consumers.”