JD.com Pays $397 Million for Stake in Fashion Shop Farfetch

Xavier Trudeau
Juin 22, 2017

Chinese internet giant JD.com has splashed out 397 million U.S. dollars (£314 million) on a stake in London-based online fashion retailer Farfetch. Farfetch now partners with 200 brands and 500 multi-brand retailers there and its new alliance with JD.com will give it access to JD.com's wide logistics network (including JD Luxury Express, its premium courier service), online payment and consumer microcredit tools, social media resources such as its partnership with WeChat, and big data.

JD will become a major shareholder in the United Kingdom firm following the transaction and its CEO Richard Liu will join Farfetch's board, it said in a statement. JD said it will refer web traffic and help on deliveries, while Farfetch's customers get to use its partner's local payments and lending services.

Founded in 2008 by Portuguese Jose Neves, Farfetch last raised 110 million USA dollars (£87 million) in 2016 in a funding round which saw Singaporean investment fund Temasek become an investor. Despite the investment, JD and Farfetch remain competitors: fashion houses can continue to sell their product on either platform.

JD.com will also gain from the partnership, pushing into the luxury market and setting itself apart from its rival Alibaba, which has suffered from a reputation of selling counterfeits. "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".

JD.com's other efforts to attract affluent consumers include holding runway shows in fashion capitals like NY and Milan, hiring a new president of worldwide to develop partnerships with global brands, and launching JD Fashion as its own business unit.

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