Chinese e-commerce giant JD.com has made its largest overseas investment ever, in online Farfetch fashion marketplace.
JD.com has bought a US$397 million stake in Farfetch, solidifying a partnership that will see its CEO Richard Liu take a place on the UK company’s board. It will also make JD.com one of Farfetch’s largest shareholders.
This comes amid a push by the luxury-oriented Farfetch to expand in Asia, having raised $110 million in 2014 to support China growth. The new partnership will allow Farfetch to make use of JD.com’s logistics network and marketing systems, alongside online payment technology and social-media resources like its partnership with WeChat.
An added bonus for the UK fashion marketplace is an increased ability to tackle counterfeit luxury products produced in the region.
JD.com will also benefit from the partnership, pushing into the luxury market and setting itself apart from rival Alibaba.
“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,” says Farfetch founder/CEO Jose Neves.
Just this month, JD.com launched its high-end delivery service JD Luxury Express, with staff in suits and white gloves delivering packages via electric vehicles directly to customers’ homes.
Farfetch, which counts France’s Eurazeo, Singapore sovereign wealth fund Temasek and China’s IDG Capital among its investors, was valued at around $1.5 billion in a fundraising last year.