A chinese group bought a stake in the luxury items' company founded by the Portuguese José Neves. The CEO of JD.com will be a part of Farfetch's board of directors.
JD.com, the Chinese giant electronic commerce of fashion, invested 397 million dollars in Farfetch (around 356 million euros). In spite of the agreement, Farfetch will continue to operate its online store in China, instead of selling their articles through JD.com, the company stated in a press release. The purpose of this deal is to respond to the increase demand for luxury items in China.
Farfetch is a company which sells luxury items on the internet; although it is headed in London it was founded by the Portuguese José Neves. In a press release, the company announced JD.com will become one of its largest shareholders and the founder and CEO of JD.com, Richard Liu, will become a member of the board of directors. “JD will help drive further brand awareness, traffic and sales for Farfetch in the market”, Farfetch highlights.
As part of our major luxury push, we could not have found a stronger online partner than Farfetch.
José Neves states that he is “very proud and excited to announce this partnership with Richard Liu and JD.com. China is the second largest luxury market and we are delighted to have on our side such a well-known partner”. This partnership will allow both brands to give their clients and buyers of Chinese luxury “an immediate and restriction-free access to the best luxury items selection”.
Quoted in the press release, the CEO of JD.com also considers: “As part of our major luxury push, we could not have found a stronger online partner than Farfetch”. He also added: “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”.
Farfetch is considered a “unicorn” — which means it is a startup worth one billion dollars. Through this partnership, Farfetch will benefit from the main platforms and channels from JD.com. This could be another step in the much awaited IPO. José Neves believes he should have new updates next year.