Farfetch partners with JD.com to open gateway for luxury brands to China
Farfetch has announced a strategic partnership with China's largest e-commerce business and retailer, JD.com, that will create the premier platform for luxury across China and open up access to an $80bn market for luxury brands.
As part of the deal JD has invested $397m in Farfetch, making it the luxury platform's largest shareholder, and its founder and CEO Richard Liu will join the Farfetch board.
The partnership will leverage JD’s logistics, internet finance, technology capabilities and social media resources, including its WeChat partnership, and Farfetch’s leadership in global luxury, to create "a frictionless and seamless brand experience".
Farfetch already has an established business in China representing 200 luxury brands and more than 500 multi-brand retailers. 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.
JD and Farfetch say the partnership will benefit all 700 brands and boutiques that are part of the Farfetch community by enabling them to take advantage of the combined resources of the two businesses and of the new gateway to China’s luxury market.
JD recently launched JD Luxury Express, a "white glove" service including same-day delivery and a premium level of service, which Farfetch will now be able to offer its customers. Farfetch partner brands with a local retail presence will also have access to JD's omni-channel capabilities, including click & collect and in-store returns.
The deal between the two companies will also include leveraging BlackDragon, a digital marketing technology platform, which will enable Farfetch to activate JD’s big data resources and help it market and build automated marketing pipelines to further Farfetch’s name recognition and market position in China.
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 a preferred payments partner, and Baitiao, JD Finance’s popular consumer microcredit channel.
JD has recently been placing an emphasis on luxury and has held fashion shows in New York, Milan, London, Beijing and Shanghai. At the start of the year it appointed Winston Cheng as President of International to lead its international business development with global partners and overseas investments.
It also separated JD Fashion into a new business unit under the e-commerce business and named Xia Ding as the president. This year it launched several luxury brands on its site including Armani, Swarovski and Zenith.
“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 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.”
Farfetch founder, co-chairman and CEO, José Neves said he was "deeply honoured and excited" to announce the partnership with Liu and JD. "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," Neves said.
Last week Farfetch revealed it had entered into a global content and commerce partnership with publisher Condé Nast, also a Farfetch shareholder, which closed its own newly launched shopping platform Style.com as part of the agreement. Traffic from Style.com is now being directed to the Farfetch platform Condé Nast’s online content and social media will be used to drive shoppers to the Farfetch platform.
Condé Nast International chairman and chief executive Jonathan Newhouse also joined the Farfetch board which includes Dame Natalie Massenet, founder of Net-A-Porter, who joined the business as non-executive co-chairman earlier this year.
"We are honoured to have the advice and guidance of China’s premier e-commerce guru as part of our highly experienced team, sitting around the same table as the world’s luxury online pioneer and one of the world’s pre-eminent publishers," said Neves.