Executive Summary

• China’s largest online retailer JD.com and consumer-focused, private-equity firm L Catterton Asia have invested $175 million in Secoo, the largest online luxury fashion retailer in China.
• The partnership brings benefits to all three parties. Secoo will leverage L Catterton’s global fashion and retail knowledge and JD.com’s e-commerce expertise to expand into the global luxury market, while JD.com and L Catterton will be able to enhance their position in the luxury market in China.
• The luxury goods market in China is already large and is forecast to account for 40% of global luxury sales by 2024. In the next three years, millennials in China, who are enjoying a higher standard of life compared to their parents, are expected to become the main consumers of luxury products.
• Brands can appeal to this growing and important segment by approaching them in a more personal, relatable and engaging way, and even by adding an element of nostalgia, according to some commentators.