JD.com invested about USD 400 million for a stake in U.K.-based high-end e-commerce platform Farfetch in June
Chinese e-commerce company JD.com Inc. plans to open a luxury platform on its online retail site, ratcheting up its competition with larger rival Alibaba Group Holding for China’s high-end shoppers.
Chinese consumers account for 30 % of global luxury spending, and they are increasingly doing their high-ticket shopping at home as the Chinese government looks to stem capital outflows.
JD invested about USD 400 million for a stake in U.K.-based high-end e-commerce platform Farfetch in June. Chief Executive Officer Richard Liu announced plans for the new platform as the company reported second-quarter earnings, but didn’t provide further details.
Alibaba launched a luxury platform early this month, selling brands such as Spanish fashion brand Loewe and U.K label Burberry .
JD reported a loss of 496 million yuan, or USD 74.4 million, in the three months ending June 30—nearly double its loss of CNY 252 million yuan for the year-ago quarter.
Revenue rose 44 % to CNY 93.2 billion in the second quarter, and is expected to grow as much as 40 % this quarter, JD said.
In May, JD reported its first profitable quarter since going public in 2014, but its chief financial officer warned at the time that investments into new businesses and warehouses would weigh on profits this year.
Beijing-based JD, whose shareholders include Wallmart Stores Inc. and Tencent Holdings Ltd, differs from Alibaba in that it runs an online direct sales business in addition to an e-commerce marketplace. Alibaba, headed by Chairman Jack Ma, operates like an internet marketplace, running platforms for individual sellers, small and big businesses to connect with sellers.
JD’s Nasdaq-listed shares have rallied more than 80 % this year, as the online retailer has wooed customers by adding imported items to its offerings and expanding its product range to include apparel, luxury goods and baby products. JD’s shares recently traded at USD 43.56, down 5 %.