Qudian, which primarily specializes in fintech services, has agreed to purchase $100 million-worth (or 28.9 percent) of Secco’s shares, according to a statement. The deal makes the Xiamen-based company Secco’s largest stockholder.
Secoo and Qudian also agreed to work together in the luxury e-commerce market. “Our partnership will bring value to both Secoo and our Wanlimu platform, and also establish a good foundation for a better user experience for our customers,” said Min Luo, the founder, chairman, and chief executive officer of Qudian.
The investment and partnership show that both companies are ambitions about grabbing a bigger slice of China’s luxury e-commerce market, which has been dominated by Alibaba‘s Tmall Luxury Pavillion and JD.com. Interestingly, the industry rarely sees a collaboration between domestic players, and Alibaba and JD.com have only worked with overseas players — Net-A-Porter and Farfetch, respectively — through joint ventures or acquisitions.
It’s obvious what Secco and Qudian can each bring to the table: The 12-year-old Secco has the luxury market know-how, whereas Qudian understands financial services and direct-sourcing capabilities (as advertised on Wanlimu). The fact that these two companies are local also means that they can avoid the typical partnership problems that arise between a Chinese company and a foreign entity like a prolonged decision-making process and miscommunications.
Competitors only become allies when they have common enemies, and for these two, it’s the e-commerce giants Tmall and JD.com. Qudian, which recently reported a 54.3-percent drop in group-wide revenue during its first quarter, is the one taking a larger risk here. And as its founder stated, the company will invest even heavily in Wanlimu’s inventory, sales, and marketing. It will be interesting to see if any of these efforts can move a needle in this top-heavy field.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.