China’s JD.com invests $397m in PE-backed Farfetch
China-based JD.com has invested $397 million in UK-based Farfetch, a PE-backed online luxury fashion retailer, as part of a new strategic partnership to pursue growth in China.
The Chinese e-commerce player will become one of the largest shareholders in Farfetch, while its founder and CEO, Richard Liu, will take a seat on the company’s board, according to a statement.
Last year, Farfetch raised a $110 million round specifically for Asian expansion. The region accounted for 26% of its overall sales at the time, with China alone contributing 12%. The nine-year-old company now partners with 200 global luxury brands and more than 500 multi-brand retailers to sell products through its online platform.
The partnership with JD.com will give Farfetch access to the Chinese company's in-house logistics facilities capabilities – including its newly-launched premium courier service JD Luxury Express – and financial services including online payment JD Pay and consumer microcredit platform Baitiao. It will also leverage JD.com’s social media and technology resources such as its partnership with WeChat, with a view to marketing its platform and building a stronger brand in China.
“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 intellectual property, with whom to address Chinese luxury consumers,” said José Neves, founder and CEO of Farfetch. “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.”
The investment in Farfetch comes as JD.com is placing greater emphasis on high-end retail in order to differentiate itself from Alibaba Group, which mainly targets the mass market. Over the last two years, JD.com has hosted fashion shows in New York and Milan, hired a new president to develop business partnerships with international brands, and reorganized its luxury goods business JD Fashion under a standalone unit.
Asian and global investors in Farfetch's previous rounds include Ceyuan Ventures, IDG Capital, Temasek Holdings, Eurazeo, DST Global, Index Ventures, Vitruvian Partners and Condé Nast International.
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