(Yicai Global) June 23 -- As part of its drive to break into the luxury market, China's leading e-commerce company, JD.com Inc. [NASDAQ:JD], recently acquired a stake in internet fashion retailer Farfetch, and has become one of its major shareholders.
The Beijing-based tech giant agreed to invest USD397 million in the London-based seller to establish a nationwide luxury e-commerce platform covering China's USD80 billion luxury goods market as part of a strategic partnership announced by the pair yesterday.
Liu Qiangdong, JD.com's chairman and chief executive, will join Farfetch's board of directors. The company will remain an independent brand, and collaborate with JD.com on marketing, logistics and technology development.
Under the deal, JD.com will help its British collaborator build an automated marketing system in China to boost its brand image and market position. Farfetch customers will have access to JD.com's payment and consumer finance services as well as its newly rolled out Jing Zun Da high-end logistics service.
Farfetch is JD.com's strongest partner for its plan to branch out into the luxury goods business, Liu said. "Cooperating with Farfetch will consolidate our leading position in future battles," he said.
Farfetch sells upscale fashion products from over 700 boutiques and brands around the globe. It received USD110 million in investments from Vitruvian Partners, Temasek, IDG Ventures and Eurazeo in a financing round in May 2016.
JD.com has ramped up its luxury and fashion operations in recent years. It hosted fashion shows in New York, Milan, London, Beijing and Shanghai over the past few years.