In October last year, JD.com and Xinyu signed a strategic agreement to cooperate on product sales, customer service and business development. Results weren’t slow in coming: barely a month later, Hamilton announced the opening of its first online authorized flagship store in China on JD.com. As for customer service, since January 60 Xinyu offline stores are working with JD’s online platform. Further rapprochements are expected between Xinyu’s nearly 400 offline stores and 80 customer service branches nationwide, and JD’s seven warehouses.
JD.com is the second-largest e-commerce portal in China with over 300 million customers, second only to Tmall.com (Alibaba). As well as the advantage of a self-operated, start-to-finish logistics system, JD enjoys a better reputation for consumer trust, after Alibaba has been dogged by counterfeit issues. Since 2017, JD has been aggressively tapping into the online luxury retail market. In August 2017, Chopard launched its online flagship store on JD.com selling both its jewelry and watches. Then at SIHH 2018, H. Moser & Cie. announced it too would be partnering with JD.
For all luxury purchases, JD offers the “JD Luxury Express” delivery service, a feature that brands appreciate. Items are delivered within 24 hours by well-trained, smartly-dressed couriers driving luxury cars. Audemars Piguet, which chose JD for its e-commerce debut, was able to test the service last April: the first client to order from the brand’s online pop-up store received his watch straight from the hands of François-Henry Bennahmias, CEO of Audemars Piguet, accompanied by Richard Liu, founder of JD.
Over the past two years, the group’s watch division, JD Watch, has worked with many of the world’s finest international brands and has grown into a favourite online outlet for many prestigious names in Swiss watchmaking. More brands, more customers, more networks and better customer service: JD has a lot to gain from the collaboration with Xinyu.
Will the partnership be mutually beneficial? What will JD bring to Xinyu? Contacted for this article, the Group’s management declined to comment, stating that the company is in the critical phase of preparing for an IPO. As for JD, which is already listed, it has not revealed the investment amount or posted an English-language press release on its international website.
Xinyu has already reached sales of USD 2.2 billion and accounts for 30% of Swiss watch sales in China.
As a leading international watch retailer, Xinyu has already reached sales of RMB 15 billion per year (about USD 2.2 billion) and accounts for 30% of Swiss watch sales in China. Through long-term stable cooperation with Swatch Group, LVMH, Richemont, Kering and Rolex, Xinyu carries 52 international watch brands including Breguet, Blancpain, Vacheron Constantin, Omega, Jaeger-LeCoultre and Cartier.
In 2015, Xinyu started building its own online retail platform, 盛时 (www.censh.com), selling all 52 brands. It combines a website, WeChat and an app to offer an online-to-offline shopping experience. The collaboration with JD could well impact the amount of business Xinyu does on its own platform, and might even have repercussions on its offline sales. So why make this move? We can only speculate: possibly Xinyu’s online platform is underperforming and its partnership with JD will shed a favorable light on Xinyu’s IPO. Another possibility is that JD will take a stake in Xinyu Group when it goes public, binding both parties in this “strategic investment”.