Luxury fashion retailer Farfetch will merge its China sales platform with ecommerce giant JD.com before the end of the year as it looks to cash in on growing demand for luxury goods in the country.
The merger, first announced last month, comes after the London-based firm bought Toplife, JD.com’s luxury fashion venture.
JD.com, which is one of China’s largest online shopping sites, invested $397m (£306m) in Farfetch in 2017, but had previously run its luxury fashion division separately.
JD.com said the merger will allow Farfetch to make use of the company’s technology and logistics platform and create a gateway for luxury brands into China.
Jose Neves, Farfetch founder and chief executive, said: “We are delighted to build on our relationship with JD.com, and bring to market an unrivalled solution for luxury brands to succeed in the Chinese market.
“With this agreement, and our previous strategic investments in China including our acquisition of Curiosity China, we now offer luxury brands a one-stop solution to develop their digital strategies in accessing the engaged and sophisticated audience in this important market.”
The move comes as the retailers look to cash in on growing demand for luxury goods in China. The country has recently cut taxes on imported goods in a bid to encourage its citizens to buy goods domestically, rather than abroad and in duty-free stores.
But questions have been raised about the widespread issue of counterfeiting on Chinese sites. Last year luxury brand Gucci said it was hesitant to partner with JD.com and Alibaba due to the number of fake goods listed on the sites.
But in an interview last week Neves said Farfetch will give brands a choice about whether or not they appear on JD.com.
“Of course we will listen to the brands and we will consult them about their presence on this new channel,” he said. “We will offer brands the option not to be on the platform, but our recommendation is to be on it.”
Jon Liao, chief strategy officer at JD.com, said: “This win-win collaboration is a key development in our ongoing relationship with Farfetch. We are combining the best of global and local market expertise in the luxury segment.”