JD.com’s Toplife merges with Farfetch
Written by Peter Walker
A new partnership agreement will see JD.com’s luxury e-commerce platform Toplife merge with Farfetch China.
The deal will effectively see JD.com close down the venture - launched in 2017 - as part of a luxury goods market expansion to compete with Tmall’s Luxury Pavilion page from Chinese e-retail rival Alibaba.
The partnership will see products from more than 3,000 luxury brands made available for JD.com’s 300 million app users, via Farfetch’s network of 1,000 brand and boutique partners.
Farfetch and JD.com were partners in logistics, technology and marketing since 2017, when the Chinese e-commerce giant became a major shareholder. JD.com founder and chief executive Richard Liu also joined Farfetch’s advisory board.
The news came as Farfetch has posted a trading update detailing rising revenues alongside mounting losses due to expansion costs.
For the year ending 31 December, the London-based, New York-listed online retailer saw revenues climb 56 per cent year-on-year to £454 million. Gross merchandise value also rose by 55 per cent year-on-year, from £687.2 million to £1.05 billion, with sales boosted by a 31 per cent increase in the number of active customers during the period.
Adjusted earnings before tax for the final quarter narrowed to an £11 million loss, compared to the £17.3 million loss in the fourth quarter of 2017. Full-year earnings before tax widened from £43.8 million to £72.4 million.
Farfetch blamed the losses on costs associated with expansion and its IPO listing.
“By all measures, 2018 was a blockbuster year for Farfetch,” chief executive Jose Neves said. “We continued to lead the online personal luxury goods market, growing gross merchandising value 55 per cent for the year – more than twice as fast as the industry.”
“We also exited our first decade as a company with an incredible foundation for realising our platform vision globally, including in China, with the announced acquisition of Toplife solidifying Farfetch as the premier luxury gateway to China.”
Earlier this week, Harrods partnered with Farfetch to assist with the development of a global e-commerce platform.