Farfetch scores $397m from Chinese e-commerce giant JD.com
- Author: Zachary Reyes Jun 24, 2017,
Jun 24, 2017, 2:11
The partnership, which sees leading Chinese retailer JD invest $397m in London-based Farfetch, brings together JD's China-based logistics, technology and social media marketing resources, including a partnership with WeChat, with Farfetch's expertise in luxury retailing.
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.
Farfetch has established operations in China and is already the partner of choice for 200 luxury brands and more than 500 multi-brand retailers.
A few of the benefits from the partnership include a complementary approach to JD's recently launched JD Luxury Express, a "white glove", same-day delivery service, which will benefit from Farfetch's thorough understanding of the luxury sphere. But China comprises only 10 percent of its global revenue despite China being the world's second-largest luxury market, and the company has been busy raising funds for further expansion.
The joint efforts between the two companies will also include leveraging BlackDragon, a digital marketing technology platform powering entities across retail, e-commerce, tech, finance, travel, education and auto, and grant Farfetch users in China access to a variety of services from JD Finance. Valuation is not disclosed in the JD.com deal.
This will make JD.com one of Farfetch's largest shareholder, although a specific figure of its stake its stake in the company has not been specified.
"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", he added. In addition to this, Farfetch is expected to gain insight and access to JD.com's Chinese online payment solutions, big data systems, and its positive reputation when it comes to fighting counterfeits.
The Farfetch deal is in line with JD's push as the online United Kingdom fashion retailer is partnered with roughly 700 global luxury brands and boutiques.
"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".
Since the beginning of the year, the company has hired Winston Cheng as president of global to lead its worldwide business development.