JD.com Takes Equity Stake Duty-Free Retailer Lagardère

Chinese e-commerce giant, JD.com is expanding in the travel-retail channel by taking a shareholding in the North Asia business of Paris-based global duty-free operator Lagardère Travel Retail. The Company is part of France’s Lagardère Group.

JD.com and state-owned fund China Jianyin Investment (JIC) are jointly investing $112 million to take respective shares of 18.6% and 3.7% in the North Asia division. The Company generated revenue of $176 million in 2020 from travel shopping and duty-free activities in Mainland China, Hong Kong and Japan. The deal is expected to close next month.

Late last year, JD.com’s rival Alibaba Group took a stake in the world’s biggest airport retailer Dufry, with plans to jointly target the travel-retail business in China which is booming. Now it was JD’s turn to make a deal in the Duty Free sector.

According to Lagardère, the partnership will enable it to accelerate growth in China and evolve its business model by honing omnichannel skills, an area in which JD.com excels. The e-commerce player also has strong expertise in smart supply chain, logistics and analytics/consumer insights.

Duty Free Store operated by Lagardère

This was shown by the company’s 618 Grand Promotion in June. During the event at least 84% of the ordrs were fulfilled on the same or next day across China. Luxury players involved included brands from LVMH Group, L’Oreal’s Kiehl’s, and Estée Lauder Companies brands which have seen strong travel-retail demand in the Chinese offshore duty-free market.

Benefits of the deal for JD.com include Lagardère’s presence in 32 airports and 28 high-speed railway stations in North Asia through a network of 480 stores selling a wide range of categories including luxury, duty-free, specialty retail and food and beverages.

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