PARIS (Reuters) – Chinese e-commerce company JD.com is folding its high-end Toplife enterprise in the fashion retailer Farfetch’s business in China, hoping to expand in the luxury goods market where it competes with Alibaba to attract the shoppers.
FILE PHOTO: A sign of China’s e-commerce company JD.com is seen during the third annual World Internet Conference in Wuzhen town, Jiaxing, Zhejiang, China, November 16, 2016. REUTERS/Aly Song
The companies, already partners in sectors such as logistics, said on Thursday that Toplife – brands such as Allowance, Saint Laurent and Balenciaga on her platform – want to merge in a Farfetch China.
The deal raises the stakes in a battle to the angle on China’s growing online luxury goods world, where Alibaba has already partnered with henri Cartier-owner Richemont and Yoox Net-A-Porter online retailer to create new applications.
Chinese consumers are one-third of luxury goods purchases in the world, and more of that spending is shifting away from the European shopping capitals to the mainland of China, and to the Internet.
Foreign brands have struggled to crack China’s rapidly changing online world, which has pushed them to try out partnerships with local players.
The Chinese e-commerce companies, meanwhile, the lack of the luxury expertise of the likes of Farfetch, which was launched more than 10 years ago, and experimenting with different formats to reach shoppers.
JD.com China’s second largest e-commerce company, founded Toplife mid-2017, which as a stand-alone platform, separate from the mass-market site, and where luxury brands, had control over their own online stores.
Alibaba has a similar company called Luxury Pavilion, is aimed at giving labels such as Italy’s Valentino a more exclusive space than on the regular TMall platform.
JD.com not say what would happen with the luxury brands from the’ shop-in-shops” currently on display at Toplife, which will no longer exist as such.
Farfetch is based in London, but listed the shares in New York last year. The company, already present in China, has JD.com as one of the largest shareholders.
It is now accessible through JD.com’s mobile application, potentially giving access to the Chinese platform’s 300 million customers.
Than hold inventory, such as some online fashion retailers, Farfetch connects buyers with high-end boutiques all over the world.
JD.com shares rose 3.5 percent on Thursday, after its quarterly results beat forecasts.
Reporting by Sarah White