JD.com, Alibaba’s largest rival in the Chinese e-commerce market, has invested nearly $400 million into Farfetch, a fast-growing online marketplace for luxury fashion boutiques.
Alongside the $397 million investment, JD.com founder and CEO Richard Liu is joining Farfetch’s board. Exact terms of the deal could not be learned, but a source said Farfetch’s new valuation is a significant step up from its earlier $1.5 billion figure.
For Western apparel and fashion brands, the rise of the Chinese luxury shopper has made China an increasingly crucial market. London-based Farfetch already has operations in the country, but the deal is meant to expand them. JD.com will drive web traffic to the Farfetch site and offer logistics help to its brands and boutiques, among other services.
The move comes as both JD.com, with a market cap of $57 billion, and Alibaba are making a big push to court Western fashion brands to their own sites. Some of Farfetch’s merchants already sell on JD.com and the two sides will continue to compete in many ways, the companies said.
JD’s model is similar to Amazon’s as it serves as both the country’s largest retailer that sells directly to consumers as well as a marketplace on which other merchants can hawk their wares. All of Alibaba’s websites, on the other hand, operate exclusively as marketplaces. Both companies dominate the e-commerce landscape in China, where Amazon has long struggled.
Walmart owns around 11 percent of JD.com.
This article originally appeared on Recode.net.