Online luxury fashion platform Cettire said it has penned a new deal to enter mainland China through a partnership with e-commerce giant JD.com, sending its shares up by more than 21 percent.
Mainland China is expected to be the world’s largest market for personal luxury goods by 2025, representing around 25 percent of the $600 billion global markets.
Cettire believes this is a $150 billion potential market opportunity for the group that sells luxury bags, clothing, and shoes for adults and children, and is making a push into the beauty segment.
On Monday, Cettire shares jumped 21.79 percent to $2.85 each, clawing back nearly all of last week’s major slide lower, and pushing its market capitalization up over $1.1 billion.
Chief executive and founder Dean Mintz said China represented a “vast” opportunity given the market size for personal luxury goods and the importance of e-commerce.
Cettire’s brands ranging from Balenciaga to Burberry will be available to mainland Chinese consumers during the second half of the calendar year 2022.
“Our entry into China is a significant milestone towards our goal of being the world’s largest luxury destination,” Mr Mintz said.
“China represents a vast market opportunity, and it is core to our strategy to make our world-class proposition available to additional markets. Today’s announcement is another step in our strategic journey to achieve this goal.”
E-commerce platform JD.com has 550 million active customers and is China’s largest online retail platform, with 745.8 billion yuan ($1.66 billion) in revenue in fiscal 2020. JD.com is a supply chain-based technology and service provider to help brands and partners drive sales.
Through the Cettire partnership, Chinese consumers will have access to 1700 luxury brands and post-sales support, the company said.
JD.com will help to drive traffic, brand awareness and accelerate growth for Cettire in China, with scope for Cettire to leverage JD.com’s extensive local logistics capability, which provides one of the largest fulfillment infrastructures globally.
In late 2021, Cettire hired local Chinese engineers in mainland China to support the development of website features specific to China and Chinese speakers globally – including launching Chinese language websites to all Cettire’s existing markets.
Cettire holds no inventory of its own, with products ordered via its website, and sent from third-party suppliers. Cettire’s fulfilment is fully automated.
Unlike larger rival Farfetch, Cettire has only flagged one direct brand relationship with Italy’s Staff International. Brands like Gucci (owned by French-based multinational Kering) have no say on the pricing of its products on Cettire’s marketplace. Cettire has also geoblocked French and Italian IP addresses, making it more difficult for such fashion houses to see where product is coming from.
Cettire was advised by Highbury Partnership on the deal.