
JD.com Signs Up Calvin Klein and Under Armour to Battle Alibaba
Chinese e-commerce company JD.com (JD) announced on Monday that it is now selling Calvin Klein, part of Phillips-Van Heusen (PVH) , on its marketplace, following the recent addition of Under Armour (UA) .
While the brands will not be on JD.com exclusively, the deals are still significant for the company as it battles against Alibaba (BABA) , its biggest rival, to attract more international sellers. The hope is that having more international products on its site will give Chinese consumers more reason to shop on the site.
In June, Alibaba's Jack Ma came to the United States to meet with brands and sellers and convince them to sell on Alibaba. The following month, JD.com launched a U.S. Mall to host American products on a specific platform.
"It's safe to say that they both want the same thing -- [to feed] this hunger for Chinese consumers to consume big Western brands," Wedbush analyst Gil Luria said in an interview at the time.
That's why the two companies are fighting so hard to get brands such as Under Armour on board, hoping they will give them a leg up on the other.
The other benefit to getting big international brands on their platforms stems from the high concerns around counterfeit. China in particular has a lot of issues with counterfeit goods in the e-commerce world, so if a Chinese consumer can be sure the product he or she is buying online is from Calvin Klein, that counts for a lot.
"By working with iconic brands like Calvin Klein, JD.com is bringing the best of international fashion to Chinese consumers," said Lijun Xin, president of JD Mall's apparel and home furnishing business unit. "We've been able to take a leadership position among wealthy urban shoppers because of the trust they have in the authenticity of our products in a market known for counterfeits."
Alibaba recently reported its December quarter earnings, which topped analysts' expectations for both revenue and earnings. The company brought in $5.3 billion in revenue, up 32% year over year, with earnings per share of 99 cents. Analysts were expecting revenue of $5.1 billion and earnings of 88 cents per share.
JD.com has yet to announce when it will report its most recent quarterly earnings, but the company will certainly face comparisons to the surprising success Alibaba had in its recent quarter.