China’s second largest e-commerce giant JD.com has injected a whopping $397 million in London-headquartered Farfetch as part of a strategic partnership. Both the entities will work together on marketing, logistics and technology solutions to build the brand in China, while Farfetch will continue to be the customer-facing brand.
This collaboration will tap on JD’s unparalleled logistics, Internet finance and technology capabilities, social media resources, including its WeChat partnership, along with Farfetch’s leadership in global luxury. Post this transaction, JD.com will become one of the largest shareholders of Farfetch, and its founder and CEO Richard Liu will join the Farfetch board. In an official statement, Richard says,
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 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.
Farfetch had launched is 2014 in China and has well-established operations in China. It is already the partner of choice for 200 luxury brands and over 500 multi-brand retailers. Now, JD with this new association will help it drive further brand awareness, traffic, and sales in the market. This will prove to be a gateway for 700 brands and boutiques that are part of the Farfetch community to China’s $80 billion luxury market. The
The Farfetch users can also access a slew of services offered by JD Finance that include JD Pay, which will be a preferred payments partner, and Baitiao, JD Finance’s popular consumer microcredit channel. José Neves, Founder, Co-Chairman and CEO of Farfetch, said,
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.
The announcement comes as JD is directing its attention to high-end luxury and fashion to meet the rising demand among its upwardly mobile customers.