La Chapelle acquires 45 percent of online fashion retailer QiGeGe

Shanghai-based La Chapelle Fashion Co., Ltd (6116.HK), one of the largest fashion apparel companies in China, has announced it has entered an equity transfer agreement and a capital injection agreement with the ever-expanding online fashion retailer Hangzhou Anshe E-Commerce Company Limited, better known for its brand name QiGeGe.

Thanks to the agreement, La Chapelle will acquire approximately 45 percent of the total registered capital of QiGeGe with a total consideration of 135 million renminbi.

Additionally, the pursuant company will inject 65 million renminbi in new capital into QiGeGe. Upon completion of the above transactions, La Chapelle will possess 54.05 percent of the equity shares in QiGeGe.

As further explained Wang Yong, Executive Vice President of La Chapelle, this investment is framed within the company’s O2O strategy to strengthen its leading position in mass-market ladies' casual wear market. Having launched the group's online flagship store on Tmall last year, La Chapelle has been actively looking to form a strategic alliance with additional online shopping platforms to further improve its online sales and marketing capabilities.

QiGeGe has a reputable team specialising in online marketing and sales with extensive experience in conducting effective online marketing and advertising through the operation of online platforms and interactions with customers.

In a note, both companies highlight how investing in QiGeGe will enable La Chapelle to capitalise on the talents of the former, while QiGeGe will also benefit from the Group's strong supply chain and capability to execute multi-brand strategy.

"The economic benefits from the fans group in Wechat and Weibo have been increasingly obvious in recent years. A number of new Internet companies with strong online sales capabilities have been spawned by this Fans Economy. QiGeGe is one of the representatives in this field. Unlike traditional e-commerce platform, these emerging Internet companies maintain and operate their fans base through online channels like Wechat and Weibo, which lowered the operating expenses and increased the rate of conversion from visits to final transactions, realising the goal of 'low cost, high conversion rate'. QiGeGe's strong online operational capability and effective marketing among fans group has established high reputation in the online fashion retail sector in China, making it an ideal partner for La Chapelle to develop online sales platform under our own brand,” said Yong.