E-commerce giant, JD, China’s largest retailer, and Farfetch, the leading global e-commerce platform for the fashion industry, have entered into a strategic partnership to create the premier platform for luxury e-commerce across China, opening a gateway to an $80 bn market. JD will help drive brand awareness, traffic and sales for Farfetch. The strategic partnership between JD and Farfetch leverages JD’s unparalleled logistics, internet finance and technology capabilities and social media resources, including its WeChat partnership, with Farfetch’s leadership in global luxury, to create a frictionless and seamless brand experience. Farfetch has well-established operations in China and is already the partner of choice for 200 luxury brands and more than 500 multi-brand retailers. JD will help drive further brand awareness, traffic and sales for Farfetch in the market.
As part of this partnership, JD will become one of the largest shareholders of Farfetch, investing $397 mn, and Richard Liu, JD’s Founder and CEO, will join the Farfetch board. JD and Farfetch will partner on marketing, logistics and technology solutions to build the brand in China, while Farfetch will continue to be the customerfacing brand. The combined strength of the Farfetch-JD partnership will benefit all 700 brands and boutiques that are part of the Farfetch community, enabling them to take advantage of the vast resources of this new gateway to China’s luxury market.
Leveraging JD Luxury Express, JD’s recently launched white glove service; Farfetch will be able to offer customers a premium level of service befitting the worldclass brands sold on the site. For Chinese consumers, this combination of Farfetch’s luxury know-how, and JD’s blazing same-day delivery speeds and highly professional service, will provide an unparalleled luxury proposition. Farfetch partner brands with a local retail presence, will also have access to world-class omnichannel capabilities, including click & collect and in-store returns, connecting the brands’ physical retail stores in China to consumers.
The joint efforts between the two companies will also include leveraging BlackDragon, a digital marketing technology platform powering entities across retail, e-commerce, tech, finance, travel, education and auto. BlackDragon will enable Farfetch to activate the vast resources of JD’s treasure trove of big data and help it market and build automated marketing pipelines to spur Farfetch’s name recognition and market position in China. In addition, through the partnership, Farfetch users in China will 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.
The announcement comes as JD 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 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 with global partners and overseas investments, and separated JD Fashion into a new business unit under the e-commerce business and named Xia Ding as the President, giving the vertical greater priority.
“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. We look forward to deepening our relationships with Farfetch and luxury brands in the months and years ahead,” said Richard Liu, Chairman and CEO of JD.
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. 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”.