Swiss luxury watch and jewelry brand Chopard announced Wednesday that it is opening an online flagship store on JD.com, China’s second largest e-commerce platform.
The opening comes a few days before Chinese Valentine’s Day “Qixi,” thus featuring a Qixi theme. In addition to its classic Happy Diamonds, Happy Sports and Mille Miglia series, Chopard also offers a Happy Ocean series and a new style of Happy Hearts bracelet in red. Both are limited editions only for sale on JD.
This is the first time the 157-year-old luxury company has opened an online channel in China. It's official Chinese site only displays, but does not sell, products. JD has 258 million active customers. So joining JD will allow Chopard to reach a much larger audience.
But while a big move for Chopard, at this moment, it seems like an even more meaningful for JD, which has been aggressively tapping into the online luxury retail market and challenging the top player Alibaba over the past year. The e-commerce giant sees Chopard’s choice as a vote of confidence.
The fact that Chopard has chosen JD serves as recognition of JD’s industry-leading services both online and offline, said Ding Xia, president of JD Fashion, to Chinese fashion media Ladymax.
For all Chopard orders, JD will deploy a relatively new service called JD Luxury Express, which offers delivery within 24 hours by well-trained and well-dressed couriers who arrive at their destinations in luxury cars.
While rival Alibaba has always had a strong presence in online fashion retailing, JD, which started off selling electronics and home appliances, is a latecomer to online luxury retail. But its strong self-operated logistics system is advantageous in attracting luxury brands. It’s also relatively more trusted, unlike Alibaba, which has been dogged by counterfeit issues.
A series of actions in the past year have demonstrated JD’s ambitions: before Chopard, a number of luxury brands joined JD, including Gucci, Vivienne Westwood and Zenith. In June, it invested 397 million in the British online luxury retailer Farfetch, the equivalent to half of its net profits in the first quarter this year.
After the release of JD’s second quarter report on Monday, founder and CEO Richard Liu hinted that JD will soon open an exclusive luxury platform, competing with Alibaba’s “Luxury Pavilion” for China’s “high-end consumers."
JD’s second quarter report suggested it might be on the right track. It posted 44 percent revenue growth, higher than analysts’ expectations. It was also the fifth consecutive quarter that the company was profitable.
Liu attributed the success to significant consumption growth from female consumers, who usually buy products with higher gross margins. Analysts estimated that for JD’s traditional strong segments, the average gross margin is about five percent, while for clothes and fashion brands, gross margin would be much higher, in the double digits.
Alibaba will surely not wait for the market to be taken. It has also been moving quickly to snag luxury brands to its Tmall platform and its new exclusive site “Luxury Pavilion.” It also keeps demonstrating the determination to eliminate counterfeits by deploying new online tools and forming alliances with luxury brands.
With Alibaba fiercely defending its advantages and JD moving aggressively into the fashion and luxury realm, more intense competition is destined to come.