JD.com Shakes Up Management Team in Push Toward High-end Fashion

JD.com built its business on the three Cs: computers, communications, and consumer electronics. Hu Shengli led this division from 2016, building it up to take more than 50 percent market share in China in 2017. Netizens called him the "iron chief" for his tireless appearances at JD.com’s conferences announcing more and more brand partnerships. Now, as JD.com pushes deeper into new categories, Hu has been tasked with leading the Fashion and Lifestyle division, overseeing the development of fashion, home furnishings, and the high-end luxury shopping platform Toplife. JD.com’s decision to appoint one of its leading luminaries to the fashion business speaks to how important online fashion sales have become. With higher profit margins than consumer electronics, high-end fashion has become a new battlefield on which giants Alibaba and JD.com are going toe to toe, making some remarkably similar moves. Toplife launched just two months after Alibaba announced its invitation-only Luxury Pavilion last year. After Alibaba announced its New Retail initiative, promising to better integrate online and offline sales, Hu Shengli spoke about JD.com’s No Boundary Retail, which fuses e-commerce with consumers' social lives. With similar strategies in place, the competition has narrowed down to the race of talent, in that how fast they can build trust and relationship between brands. “Talent is really important and we have a fantastic team with excellent fashion and international experience,” Hu told Jing Daily. As JD.com tries to broaden its brand beyond sending out wireless keyboards, for instance, with the utmost efficiency, Hu's own experience in electronics made him a surprise choice for his current role. But Hu offered similarities between two seemingly unrelated industries. “There are a lot of similarities as far as execution goes. On the back end, it’s all about efficiency and making sure that we are stocking products correctly and getting them to customers quickly.” He also pointed out the differences. “How we present the products and the experience we provide to consumers is totally different. Fashion and lifestyle are also about presenting luxury as it was meant to be.” According to Chinese media, the presentation of luxury and fashion is not JD.com's strongest suit. Consumers have likewise criticized the aesthetics of how fashion items are presented on the site. In recent years, however, JD.com has been working with partners to address this shortcoming. Xia Ding is one of the founding members of JD fashion, having joined the team as President of fashion when JD.com separated the category out of the homeware business in March 2017. Ding has over 15 years of cross-border experience specializing in retail management. Before JD.com, she was the Vice President of Retail Service at Nielsen, and she brought American lingerie brands Hanesbrands into China market. Her understanding of fashion brands and the retail market is vital to the growth of JD fashion. Overseeing JD.com’s international fashion business, Ding is frequently spotted rubbing shoulders with movers and shakers in the fashion scene, namely Vogue editor Anna Wintour, Chinese Vogue editor Angelica Cheung, and designer Diane von Furstenberg. In September 2017, the company recruited the former CEO of A|X Armani Exchange, Harlan Bratcher to be the global Business Development head of JD fashion. Hu remarked the importance to have Bratcher on the team. “Having Harlan in New York where brands know him and can call him up whenever they want was really important to us.” Besides scouting top players to be the decision makers, JD.com has business development staff in different regions, including Japan, New York, London, Paris, and Hong Kong in order to form close relationships with local brands. For instance, JD.com appointed Florent Courau to be the Managing Director in France. He worked as COO of Sephora in North Asia and, before that, at LVMH for 12 years, six of them in China. Experience in the luxury realm is especially crucial as JD.com makes Toplife one of its core projects. Hu emphasized that Toplife is not just a shopping platform but a full luxury universe, something quite distinct from selling electronics online. In the six months since Toplife first launched, JD.com has introduced many leading brands to the platform, including Saint Laurent, Alexander McQueen, Derek Lam, ANTEPRIMA, Barrie, Mulberry and Oscar de la Renta. The average unit price is more than 5,000 RMB, and more than 1 million users joined during the first three months. While JD.com is marching into luxury fashion, unlike sites such as Net-A-Porter or Farfetch that have luxury in their DNA, high-end fashion sites in China are still very new. Recognizing the challenge, Hu remain positive. “The fashion industry is still underdeveloped in China, especially for e-commerce. We saw the opportunity there, and we believe we are building a long-term path for fashion and luxury brands in China.”

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JD.com Shakes Up Management Team in Push Toward High-end Fashion