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JD.com Invests in Farfetch and Forms Strategic Partnership

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JD.com is heating up the race to attract China’s most lucrative consumers.

Today, the e-commerce company, which is surpassed in China only by giant Alibaba, has announced a $397 million investment in Farfetch as part of the companies’ new strategic partnership.

JD is looking to Farfetch to help it secure luxury shoppers, a market it estimates to be worth $80 billion. Farfetch, which has carved out a niche for luxury fashion sales online, currently partners with 200 upscale brands and more than 500 exclusive retailers, all of which will have better access to the Chinese market through the deal.

In addition to the investment, which will make JD one of Farfetch’s biggest shareholders, the company’s founder and CEO Richard Liu will join the Farfetch board.

“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 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.”

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.”

For Farfetch, the benefits include the ability to tap into JD’s logistics, Internet finance and technology capabilities to drive additional traffic and boost sales. The company will also receive more brand awareness through JD’s BlackDragon digital marketing technology as well as the company’s strategic partnership with WeChat.

JD will offer Farfetch retailers with brick-and-mortar locations the ability to seamlessly connect their online and offline operations. Plus, shoppers can take advantage of JD’s same-day delivery service, use the JD Pay digital wallet and elect to use the JD Finance credit facility.

This deal follows Farfetch’s recent tie up with Condé Nast that will make editorial content in the publisher’s titles like Vogue and GQ shoppable.

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