Sales pitch

One of China’s biggest e-commerce companies held a runway show at New York Fashion Week

Obsession
Fashion
Obsession
Fashion

It may seem a little strange that JD.com—China’s biggest e-commerce company in terms of sales direct to consumers—held a fashion show at New York Fashion Week, but it had good reason. While JD.com was there last night (Feb. 17) to promote the work of rising Chinese designers, including Alicia Lee, Chi Zhang, and Gioia Pan, it was also promoting itself.

The company is trying to position itself as the premier portal for US designers entering China’s massive e-commerce market. According to some projections, e-commerce in China is expected to top a staggering $1 trillion by 2017. And as China’s upwardly mobile shoppers earn more disposable income, they’re looking to spend it on categories such as fashion and sportswear, especially from quality international brands. JD.com wants that business.

The company just launched an online channel called US Fashion Mall, featuring brands such as Calvin Klein, Nine West, Converse, and Under Armour. It follows on similar “fashion malls” it established for Japan, Korea, and Italy, where the company held a fashion show last September.

In a presentation before the runway show, Belinda Chen, JD.com’s manager for international business development, made the appeal of China’s e-commerce market clear: The country has 668 million internet users, 374 million of which are online shoppers. That’s more shoppers than the entire US population, and it’s still growing.

China, as eMarketer recently noted, is “easily” the world’s largest e-commerce market.

Why wouldn’t brands just set up their own e-commerce operations? First, under Chinese law, a company needs to have already established a presence on the ground in China to import into the country directly. Brands looking to get started in China can bypass this obstacle and sell directly, however, by working with special cross-border programs offered by both JD.com and Tmall, rival Alibaba’s business-to-consumer sales channel. (Alibaba’s main business is its consumer-to-consumer marketplace.) International brands can also sell to Chinese companies, including JD.com itself, that then sell their products on JD and Tmall.

In both cases, brands get access to the logistics and delivery networks that China’s e-commerce giants have established, as well as strategic support and a line to their gargantuan user-bases. Unlike shoppers in the US and Europe, Chinese customers also prefer to buy (pdf, p.14) through these mega-platforms.

While JD’s pre-show pitch went over all the reasons for fashion brands to work with them, the subtext was why they shouldn’t partner with Alibaba. JD repeatedly emphasized its track record on selling high-quality, authentic products, subtly taking a shot at Alibaba’s reputation as a market for cheap counterfeits.

As for the runway show, it also presented work from Ruiping Guo and a line by Tim Cahill, an Australian soccer star who has been playing in Shanghai. But the clothes were far less intriguing than JD.com’s reason for holding the event to begin with.

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