Move to carry top US retailer seen as effort to bolster lineup vs. Alibaba

JD.com, China's second-largest e-commerce website, started selling US-based retailer Gap's clothing on its website on Thursday, in a move to build up its collection of US brand names against e-commerce giant Alibaba.

Gap launched its flagship store on JD.com with more than 600 items and discounts for JD.com customers.

"We are delighted to launch this partnership with the Gap and provide our tens of millions of customers access to their clothing and other items," said Shen Haoyu, chief executive of JD Mall, in a statement on Thursday announcing the partnership and launch.

Henry Guo, senior equity analyst at JG Capital in Greenwich, Connecticut, said that the partnership with Gap is an attempt by JD.com to grab headlines with a well-known US brand while competing with Alibaba for business.

"Recruiting international brands is a trend that will continue, and in the future, in order to gain a better position in the market, JD.com is definitely going to talk to even more international brands in order to attract more domestic consumers to the site," he said.

Guo said that JD.com won't be able to top Alibaba's market share in the next two to three years, but it is expanding into other sales categories to catch up not only with China's No 1 e-commerce giant, but to set itself apart from other smaller players in the field.

Gap already has a store on Alibaba's Tmall, which has many official online shops for US brands selling to the Chinese, and is one of several American brands that are partners with JD.com. US clothing company Levi's and shoe company Skechers have launched stores on JD.com this year.

"JD.com has a much smaller market share than Alibaba, but I think you will see them reaching out to more brands, and for brands it's an easy way to reach a larger number of online shoppers," said Zia Daniell Wigder, research director of e-business at Forrester Research in Cambridge, Massachusetts.. "For the brands, the traffic that they see on their own director consumer sites and the sales on those sites pale in comparison to what they would see on a marketplace like Tmall or JD.com."

"You see a lot of the e-commerce players in China diversify in terms of the categories they're selling online, so I think in some ways it's not surprising they're looking to attract brands like Gap to their offering," said Wigder.

JD.com started out as a commerce platform mostly for electronic goods; its market share in the business to consumer market is about 20 percent compared to Alibaba's near 60 percent.

Gap has more than 80 stores across the Chinese mainland and generated $300 million in sales in China during the fiscal year that ended on Feb 1 this year, according to the company. It is looking to open 30 more stores by the end of the current fiscal year.

"The launch of Gap's flagship store on JD.com underlines our confidence and commitment to this growing market," said May Ng, vice-president of Gap China e-commerce, in a statement.

amyhe@chinadailyusa.com