Here is How JD.com Plans to Challenge Alibaba’s Luxury E-commerce With Toplife Launch
- Thu, 12 Oct 2017 09:40
The eve of Shanghai Fashion Week, October 11, saw the launch of the first Business of Fashion China Summit, which invited industry professionals to share expert insights into the challenges and opportunities that the Chinese market presents.
In attendance was Xia Ding, President of JD.com—China’s second-largest e-commerce website—fresh from the October 10 public announcement of the launch of its first-ever luxury online platform, Toplife. Back in June, JD.com acquired a US $ 397 million stake in British luxury shopping site Farfetch, and Farfetch Chief Operating Officer Andrew Robb spoke alongside Ding at the event.
The duo offered insights into the JD and Farfetch partnership and shared their take on how JD.com is poised to stand up to the competition that China’s number one e-commerce site, Alibaba, presents.
“From our point of view, we tried to crack the market without a partner first. We realized we needed a partner because from an e-commerce perspective, the Chinese market is entirely different from the West. With selling luxury goods, the demand is on the web everywhere but the engines are totally different in China on many levels,” said Robb.
This online demand for luxury goods has been a hotly debated topic of recent times, with e-commerce sites continuously reporting that brands believe online platforms lack the luxury customer experience to satisfy buyers.
“By talking to brands, I can summarize the three main concerns of luxury companies for selling on platforms like ours; the first is the agency to other brands, the second is protection against counterfeits, and the third reason is always the customer experience. This is why we launched our ‘White Glove Delivery Service’,” said Ding.
As part of the ‘white glove’ service launched in June, luxury goods can be delivered to any location by appointment, courtesy of a driver in an energy saving car, dressed in a suit and tie.
“This has been really well received by our shoppers, and is just one example of how we aim to provide this kind of luxury experience,” continued Ding.
Alibaba’s Luxury Pavilion offers a similar service for luxury consumers, however, Ding stressed that the difference is the independent nature of the Toplife site.
“JD.com has always faced the challenge that we were known first and foremost to come from a strong background in electronics. We were a male-driven platform, and had a hard, not soft exterior. Our collaboration with Farfetch has enabled us to build our image to extend to fashion products, and we realized that the next step is to make a fashionable platform for the shopper to be able to really think of us as a fashion platform.”
When quizzed on the competition with Alibaba, Ding believes trust of the e-commerce platform is of paramount importance for buyers, and a key factor she hopes will push JD.com forward in the battle for convincing luxury brands to join their platform.
“Toplife is an independent website exclusively for luxury brands. We want to have a clear line on this; the brands featured will be by invitation only. Other e-commerce sites have grown in a different way, by launching to everyone and then trying to eradicate some later—it’s a quick and dirty way to make money. We are exclusively for people who are interested in buying full price, quality products.”
Although its image is improving, Alibaba has faced criticism for its slow effort to clear up the sale of fake goods on the platform. Farfetch currently partners with Gucci outside of China, however, they hope the launch of JD’s new site will entice the big brands to enter the Chinese e-commerce market as well.
As Rob emphasized, “It’s really important to our clients that we have the ability to offer the right level of service that they’d be comfortable with. That’s where JD really comes in up against players like Alibaba. We’ve been talking and working with luxury fashion brands like Gucci for 5 years, and how to convince partners to sell here is simple. They want to sell in China. So why haven’t they yet? We just have to provide service to the highest level.”
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