JD.com pays US$397 million for stake in online luxury business
Chinese e-commerce giant JD.com has invested US$397 million in luxury marketplace Farfetch, as it looks to grab a bigger piece of China’s $80 billion luxury market.
The partnership sees JD.com becoming one of the largest shareholders of Farfetch and JD.com founder and CEO, Richard Liu, joining the Farfetch board.
While Farfetch, a UK-based online marketplace for luxury goods, is already well established in China, after raising US$110 million last year to expand its business there, the partnership with JD.com allows it to leverage logistics, finance, technology and social media resources, including WeChat, to drive further brand awareness, traffic and sales.
“We are deeply honoured and excited to be announcing this partnership with Richard Liu and JD.com,” Jos Neves, Founder, Co-Chairman and CEO of Farfetch.
“China is the world’s second largest luxury market, and we are delighted to have such a respected partner, known for its strict protection of IP, with whom to address Chinese luxury consumers.
“This partnership addresses the market’s challenges by combining the Farfetch brand and curation with the scale and influence of the foremost Chinese e-commerce giant.
“This strategic partnership will provide brands a seamless, immediate access to the luxury consumer and Chinese luxury shoppers with access to the greatest selection of luxury in the omni-channel way of life they have already fully embraced.”
JD.com and Farfetch will partner on marketing, logistics and technology solutions to build the brand in China, while Farfetch will continue to be the customer-facing brand.
Luxury brands on Farfetch with a local retail presence will also be able to offer click & collect and in-store returns.
The move comes as JD.com strengthens its luxury offering, having hosted fashion shows in New York, Milan, London, Beijing and Shanghai in recent years.
“We have always believed that the long-term trend of Chinese e-commerce is towards quality over price and this partnership with Farfetch further extends our lead in the battle for the future of China’s upwardly mobile consumers,” said Richard Liu, Chairman and CEO of JD.com.
“We look forward to deepening our relationships with Farfetch and luxury brands in the months and years ahead.”