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JD.com is ready to create another recordbreaking sales figure for the upcoming midyear extravaganza — the 618 shopping festival — and luxury appears to be one of the fastest-growing categories this year.” data-reactid=”20″ type=”text”>LONDON — JD.com is ready to create another recordbreaking sales figure for the upcoming midyear extravaganza — the 618 shopping festival — and luxury appears to be one of the fastest-growing categories this year.

Sales of luxury products increased more than 400 percent year-over-year in the first hour of the 618 shopping festival, which began on June 1.

  • Independent Designers Creating Collections At Home
  • During that day, sales of 60 brands jumped over 500 percent, 139 brands grew more than 200 percent, and sales of luxury apparel, shoes, and jewelry increased by 236 percent, 202 percent and 196 percent, respectively, compared to the same period last year.

    “It’s a little bit of a pleasant surprise for us,” said Kevin Jiang, president of international and fashion, during a roundtable talk on Friday. “We were very concerned in the beginning, but we were growing even during this pandemic in April and May. Now we are very confident. A lot of the consumers and our brand partners are also getting ready for the explosion of sales for the 618 shopping festival.”

    JD.com to rival Tmall’s Singles’ Day — June 18 being the day Richard Liu founded JD.com in 1998. Over the years it has become an event that all retailers engage in. This year, JD.com will also have its second listing in Hong Kong on that day, raising more than $3.9 billion.” data-reactid=”27″ type=”text”>The 618 shopping festival was set up in 2010 by JD.com to rival Tmall’s Singles’ Day — June 18 being the day Richard Liu founded JD.com in 1998. Over the years it has become an event that all retailers engage in. This year, JD.com will also have its second listing in Hong Kong on that day, raising more than $3.9 billion.

    its first major London fashion event, with a runway show that September, partnered on the BFC/Vogue Designer Fashion Fund and introduced luxury brand platform Toplife in 2017 to sell full-price products from brands like La Perla, Emporio Armani and Rimowa. Toplife struggled to gain traction at that time and the platform was eventually merged with Farfetch China in 2019.” data-reactid=”28″ type=”text”>JD.com has been trying to establish its presence in fashion luxury since 2016. It staged its first major London fashion event, with a runway show that September, partnered on the BFC/Vogue Designer Fashion Fund and introduced luxury brand platform Toplife in 2017 to sell full-price products from brands like La Perla, Emporio Armani and Rimowa. Toplife struggled to gain traction at that time and the platform was eventually merged with Farfetch China in 2019.

    signed a three-year strategic partnership with the British Fashion Council last year to further leverage its resources and capabilities to introduce British fashion brands and international up-and-coming designers to Chinese consumers, as well as supporting Chinese designers, such as Hazzy, Huishan Zhang, Xu Zhi and Feng Chen Wang to show in London.” data-reactid=”29″ type=”text”>But JD.com continued to invest in fashion and signed a three-year strategic partnership with the British Fashion Council last year to further leverage its resources and capabilities to introduce British fashion brands and international up-and-coming designers to Chinese consumers, as well as supporting Chinese designers, such as Hazzy, Huishan Zhang, Xu Zhi and Feng Chen Wang to show in London.

    Now, under Jiang’s direction, JD.com’s luxury business entered a new phase. Instead of throwing flashy parties during fashion weeks, he prefers to stay behind the scenes, and speak about numbers and operations.

    He said the recent biggest source of growth is coming from “overseas spending that has now shifted to domestic spending,” especially from lower-tier cities.

    China is very limited. They don’t have stores in most of the lower-tier cities. One of the things I noticed is that some of the biggest orders we received for these brands are coming from these places. A lot of those consumers used to travel to Beijing and Shanghai for these top luxury brands, but with travel restrictions, they choose to come to JD.com to purchase these products from top luxury brands,” he said.” data-reactid=”32″ type=”text”>“Top luxury brands’ presence in China is very limited. They don’t have stores in most of the lower-tier cities. One of the things I noticed is that some of the biggest orders we received for these brands are coming from these places. A lot of those consumers used to travel to Beijing and Shanghai for these top luxury brands, but with travel restrictions, they choose to come to JD.com to purchase these products from top luxury brands,” he said.

    China.” data-reactid=”33″ type=”text”>More than 1,000 fashion and luxury brands are selling via JD.com, including Prada, Delvaux, Bonpoint, Tod’s and Lanvin. Since the coronavirus outbreak began in January, the company began to offer an expedited process for store openings, and some 40 brands have joined the platform, including Church’s, Sergio Rossi, Christopher Kane and A-Cold-Wall, to tap into its customer base and optimize their inventory efficiency in China.

    luxury brands to either do wholesale or go for the marketplace model, and all orders are being delivered by its white-glove delivery service throughout the entire pandemic nationwide, excluding Hubei province.” data-reactid=”34″ type=”text”>JD.com provides a more flexible solution for brands, compared to its archrival Alibaba’s Luxury Pavilion, according to Jiang. The platform is offering fashion and luxury brands to either do wholesale or go for the marketplace model, and all orders are being delivered by its white-glove delivery service throughout the entire pandemic nationwide, excluding Hubei province.

    e-commerce business. For example, By Far, which is a very popular bag brand, which just launched with us. In April, during the height of COVID-19, every time we launch their products, within a week, over 60 percent of their items sold out.”” data-reactid=”35″ type=”text”>“We are willing to work very closely with all the luxury brand partners to build up their business through JD.com. We do offer the wholesale options to many of the smaller brand partners, who might not have a very dedicated team in China for their e-commerce business. For example, By Far, which is a very popular bag brand, which just launched with us. In April, during the height of COVID-19, every time we launch their products, within a week, over 60 percent of their items sold out.”

    Brands are taking JD.com’s luxury proposition rather seriously, despite steaming competition from other players in the market, Jiang said.

    “Many of our brands, especially for their China teams, have become experts in developing an online business in China. Two or three years ago, many of the luxury brands were still trying to see how JD.com might work. But now they are building up a very professional team to analyze the data on JD consumers. They’re also committing to aggressive local marketing and advertising plans with us, to expand their online business,” he said.

    Coming from a physical retail background, Jiang doesn’t see online business stealing market share from off-line. “Moving forward, it’s going to be an integration of online and off-line. That’s why, as a mission, we offer omnichannel solutions to the brands. They appreciate this solution because the customers can find identical collections from the off-line stores on our platform. This is even more important during a time when it’s not very convenient for the consumers to go to the shopping malls,” he said.

    “However, for many of the products, I think consumers, especially for luxury, they still need to touch and feel their products. The physical stores are still a very important part of their business to offer their image and also offer their consumer some of the best experiences off-line. That’s why we are also working with some luxury brands to have off-line events to bring the online customers to their off-line stores, so to better educate the customers about the brand’s history, about the brand’s product, and everything,” he added.

    Jiang also acknowledged the fact that, despite an impressive growth rate, the size of JD.com’s online luxury business is still relatively small, compared to selling billions of dollars’ worth of smartphones, home appliances, fresh produce, infant formula and diapers.

    But it is also its 387.4 million returning customers who Jiang is betting on to help JD.com’s luxury business grow beyond the spending rebound period, and that takes time.

    “There is a Chinese saying,’ it’s very easy to go from frugality to extravagance, but it’s very difficult to go the other way around.’ China has around 400 million middle class and above, which means we have [a] large enough [amount of] high-spending consumers in China,” he said.

    “Our customer base is relatively small, compared to the overall base. But JD.com is a destination for them to explore. Our customers have been coming to us for home appliances and high-end eggs for over a decade, some of them may one day ask, ‘should I buy luxury from JD.com?’ That’s why we will see an increasing number of new consumers buying luxury products from us in the near future,” he added.

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