JD.com and Farfetch announced this week a strategic partnership that they say will create “the premier platform for luxury ecommerce across China,” tapping into a market thought to be worth $80bn.
The partnership, which sees leading Chinese retailer JD invest $397m in London-based Farfetch, brings together JD’s China-based logistics, technology and social media marketing resources, including a partnership with WeChat, with Farfetch’s expertise in luxury retailing. Together they promise to create a “frictionless and seamless brand experience”.
Farfetch already has operations in China, where it works with 200 luxury brands and more than 500 multi-brand retailers. JD’s investment will make it one of Farfetch’s largest shareholders, with JD.com founder and chief executive Richard Liu joining the board.
The Farfetch community currently includes 700 brands and boutiques which, says Farfetch founder, co-chairman and chief executive José Neves, will now be better placed to sell into China’s luxury market.
“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,” said Neves. “This partnership addresses the market’s challenges by combining the Farfetch brand and curation with the scale and influence of the foremost Chinese ecommerce 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.”
Richard Liu, chairman and chief executive of JD.com, said: “As part of our major luxury push, we could not have found a stronger online partner than Farfetch. We have always believed that the long-term trend of Chinese ecommerce 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. We look forward to deepening our relationships with Farfetch and luxury brands in the months and years ahead.”
New services that Farfetch will now be able to offer customers include JD Luxury Express, a new white glove, same-day delivery service, while those with shops in the country will also be able to tap into click and collect and in-store returns services. Payments will be supported by JD Pay and microcredit service Baitiao, from JD Finance.
The announcement fits with JD’s strategy of focusing on high-end luxury and fashion to match demand from upwardly-mobile customers. Over the last two years, JD has hosted fashion shows in New York, Milan, London, Beijing and Shanghai, earlier this year appointed Winston Cheng as President of International to lead its international business development with global partners and overseas investments, while JD Fashion has been spun out as a separate business that has recently launched key international brands including Armani, Swarovski and Zenith on its site.
Meanwhile Farfetch has invested in store of the future technology (pictured) that it believes will met the needs of sophisticated luxury customers in years to come.
