One of China’s largest e-commerce firms is taking a bigger bet on luxury.
China-based e-giant JD.com today announced that it has invested $397 million in luxury e-tailer Farfetch to create a mega-platform for luxury e-commerce across China.
As part of the partnership, JD.com will become one of the largest shareholders of Farfetch, and Richard Liu, JD.com’s founder and CEO, will join the Farfetch board.
According to the firms, JD 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.
The announcement comes as JD is placing a greater emphasis on high-end luxury and fashion to match what the company describes as a “huge demand” among its “upwardly mobile” customers.
“As part of our major luxury push, we could not have found a stronger online partner than Farfetch,” Liu said in a statement. “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.”
The Farfetch-JD partnership, according to the companies, will benefit all 700 brands and boutiques that are part of the Farfetch community by “enabling them to take advantage of the vast resources of this new gateway to China’s luxury market.”
Farfetch partner brands with a China retail presence will also have access to JD’s omnichannel capabilities, including “click & collect” and in-store returns, connecting the brands’ physical retail stores in China to consumers. Farfetch users in China will have access to a variety of services from JD Finance.
“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,” José Neves, founder, co-chairman and CEO of Farfetch, said in a statement. “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 omnichannel way of life they have already fully embraced.”