JD.com Pays $397 Million for Stake in Fashion Shop FarfetchBloomberg News
China’s No. 2 online retailer seals its biggest overseas deal
JD and Farfetch are targeting richer Chinese consumers
JD.com Inc. has bought a stake in London-based online fashion retailer Farfetch for $397 million, in the Chinese e-commerce company’s largest overseas investment.
The deal seals an alliance between China’s second-largest e-commerce player and the online fashion shop, which is trying to boost its presence in one of the world’s fastest growing markets for upscale goods. JD Chief Executive Officer Richard Liu will join the startup’s board and both companies will work to grow sales in China. 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.
JD, which trails Alibaba Group Holding Ltd. in China, is exploring ways to grow its international presence while expanding the scope of its domestic business. The company’s said to be considering a sizeable investment in Indonesian peer Tokopedia, and has begun courting higher-income customers with a “white-glove” premium service on more expensive purchases.
JD said it now owns an unspecified, minority stake in the British startup and declined to elaborate. The Chinese company seeks to invest and partner with more e-commerce providers around the world, President of International Winston Cheng said in an interview. Despite the investment, JD and Farfetch remain competitors: fashion houses can continue to sell their product on either platform.
“We go into investments not requiring control but in the spirit of recognizing partnerships and recognizing the strengths and advantages we deliver to potential partners,” he said.
Farfetch last raised $110 million in 2016 in a Series F round. Its chief operating officer, Andrew Robb, acknowledged reports the company was preparing for a $5 billion IPO in the U.S. but declined to comment. His company plans to double a team of 50 based in Shanghai to 100 by the end of 2017, and will maintain control of the brand and all operations.
— With assistance by David Ramli