China’s second largest e-commerce platform JD.com has been making a lot of moves to expand. The latest with an investment of USD397 million in UK-based high-end fashion e-tailer Farfetch.
The investment will give Richard Liu, CEO of JD.com, a seat on the board. Farfetch sells more than 120,000 curated products from 1,500 fashion brands with presence in over 190 countries. With JD.com’s buy in, Farfetch will integrate JD’s logistics, marketing systems and payment platforms to expand into China.
“All of these things [Farfetch] doesn’t have on a global basis and they certainly don’t have in China,” said head of international business, JD, Winston Cheng. “With the rising household income in China, we think the timing is good.”
For JD.com, the deal is aimed at taking on its main competition, Alibaba, in the online luxury segment. The once popular platform for buying electronics and household items wants to broaden its offering to include consumer goods and branded items.
“The 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,” said Jose Neves, CEO, Farfetch.
Simultaneously, JD.com will be entering the Southeast Asia region, setting up hub in Thailand to cater to more than 600 million people.