Chinese e-commerce giant JD.com Inc. has invested US$397 million in London-based luxury fashion online retail platform Farfetch to become one of the largest shareholders of the U.K. firm. The deal is part of a strategic partnership aimed at bringing luxury fashion products to Chinese consumers.
As part of the deal, Richard Liu, JD.com’s founder and CEO, will join Farfetch’s board. The two companies will partner on marketing, logistics and technology solutions to build and expand Farfetch’s brand in China. The move will create a platform for luxury e-commerce across China, opening a gateway to a US$80 billion market, JD.com said in an announcement today.
"As part of our major luxury push, we could not have found a stronger online partner than Farfetch," said Richard Liu, chairman and CEO of JD.com. "We have always believed that the long-term trend of Chinese e-commerce is toward quality over price, and this partnership with Farfetch further extends our lead in the battle for the future of China’s upwardly mobile consumers."
Farfetch has well-established operations in China and is already the partner for 200 luxury brands and more than 500 multi-brand retailers. JD will help drive further brand awareness, traffic and sales for Farfetch in China, benefiting all of the 700 brands and boutiques that are part of Farfetch’s global community.
Leveraging JD Luxury Express, JD’s recently launched white glove service, Farfetch will be able to offer customers a premium service befitting the world-class brands sold on the site.
In addition, Farfetch users in China will also gain access to a variety of services from JD Finance. These will include JD Pay, which will be the preferred payments partner, and Baitiao, JD Finance’s consumer microcredit channel.
"China is the world’s second largest luxury market…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," said José Neves, founder and CEO of Farfetch.
The announcement comes as JD.com is placing a greater focus on high-end luxury and fashion to match the huge demand among its upwardly mobile customers. Over the last two years, JD.com has hosted fashion shows in New York, Milan, London, Beijing and Shanghai.
Since the beginning of the year, the company has hired Winston Cheng as president of international to lead its international business development. JD.com also separated JD Fashion into a new business unit and launched several key international brands on the site, including Armani, Swarovski and Zenith.