China's JD.com makes push to lure European luxury brands
today Apr 18, 2018
Chinese e-commerce company JD.com made a pitch on Wednesday to attract more European luxury brands to its site, saying it can offer faster delivery and better protection against fakes than bigger rival Alibaba Group Holding.
JD.com is planning an office in Milan, after opening its first in Europe in Paris in January. It is also teaming up with Spanish brands, international president Winston Cheng told journalists at the World Retail Congress in Madrid.
"We are looking for other venues as we expand," he said.
"We have one of the highest quality bases of consumers inside China, growing very rapidly."
China's second-largest e-commerce business last October launched Toplife, a platform which aims to woo luxury buyers with same-day deliveries and premium services, including extra clean and secure warehouses with special air filters.
It rivals Luxury Pavilion, a similar portal launched in August which is backed by Alibaba's Tmall platform and features products from fashion groups such as Burberry. Tmall last week launched a membership programme for Pavilion users.
JD.com says it has a "zero tolerance" policy towards counterfeit goods and has the advantage over Alibaba of running all its own logistics, allowing it to promise same and next day delivery on over 90 percent of orders.
"Fake goods is a big issue in China. Our focus on authenticity has led to our success," Cheng said.
Chinese shoppers made up 32 percent of the worldwide luxury market in 2017, more than any other nationality, consultancy Bain & Co said, making it a crucial market for fashion brands.
Cheng said Toplife had already signed up 20 brands, including names from the Kering group such as Saint Laurent and Alexander McQueen.
He said they have been attracted by its offer of delivery within one or two hours by white-gloved employees in suits, with the tallest and best-looking chosen for the task, some of them former soldiers.
He noted growing Chinese demand for luxury products, with the Gucci brand getting 100,000 searches a day on its site and sales of premium Spanish ham up 700 percent last year.
While JD.com is focusing for now on southeast Asia for expansion outside of China, Cheng said the company could eventually make moves into Europe.
"There are a lot of offline players and even online players reaching out to us because of our scale and because of our willingness to partner," he said, adding that any deal would have to be with "a very large retailer".
"Europe seems to be a battleground between maybe the Chinese and Amazon," he said, noting that the American giant had an advantage because of English being a global language.
"When we try to expand, particularly in Europe, we need to make sure we're ready from these two aspects, language and culture."
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