JD.com Competes for Luxury Partners with High-Tech and White Gloves

In a bid to ratchet up its appeal to high-end fashion and accessories companies, China e-commerce giant JD.com has opened a high-tech, dust-free, climate-controlled warehouse with unprecedented security. It’s for the exclusive use of brands that open flagship shops on JD’s luxury retailing portal TopLife. The venture appears to be working: The warehouse began operating shortly after TopLife’s launch a year ago, and is now home to a variety of luxury labels in China, including Alexander McQueen, Armani, Canali, Ermenegildo Zegna, Balenciaga, and more. Now, sources close to matter tell Jing Daily that the facility could be a magnet for even more: LVMH, the world’s largest luxury group and owners of high-profile luxury brands like Louis Vuitton, Celine, and Givenchy, will pay a visit to TopLife’s warehouse at the end of this month as a part of a business meeting with the company. JD.com’s effort to create a more upscale image for luxury brands, which includes everything from building the Shanghai warehouse to launching a premium delivery service in China, are addressing one of luxury brands’ biggest concerns about launching online: fear of their products losing an aura of opulence and exclusivity. TopLife’s warehouse is near a number of regular JD.com warehouses, but as a specialty location, it has extremely different interior and exterior designs. Upon entering, visitors immediately encounter the black and gold TopLife logo while soothing music plays in the background. They enter a room with the look and feel of a wellness spa, the only exception being a large electronic screen that runs a loop of fashion runway shows from participating brands. To improve the company's image as a luxury goods marketplace, it has even expanded its white-glove service to the warehouse instead of relying heavily on automation as it does for other warehouses. The warehouse is also more heavily secured than others since it stores high-value luxury goods. Only JD.com staff with verified fingerprints and facial recognition can enter, and when unverified people enter the system, the warehouse automatically sends an alert to local police. The core warehouse stays at a temperature of 25 degrees Celsius and a humidity level between 55-75, according to JD.com—ideal specifications for storing premium leather goods. There’s a vault for storing gold, valuable jewelry, and watches. Currently, there is a relatively small number of orders being processed per day in the TopLife warehouse, in comparison to the daily average of orders processed by regular warehouses, which stands at 100,000 during a normal period and can jump to 230,000 at peak times such as the upcoming Singles’ Day shopping festival. “However,” a JD staff member who toured the press around the warehouse on November 5 said, “we are undergoing a rapid growth period.” And with more luxury brands joining TopLife, the daily order average will increase quickly. Big luxury industry players have been slow to embrace e-commerce trends in China, but that is changing.

Sectors

Insights

Company

JD.com Competes for Luxury Partners with High-Tech and White Gloves