Google would be investing $550 million in the Chinese e-commerce powerhouse JD.com, as part of the US internet giant’s attempts towards expanding its presence in the fast-growing Asian markets and to battle the competitors like Amazon.com.
The two firms described the investment as one chunk of a much-expanded partnership that would include the growth of JD.com products on Google’s shopping service. This could assist JD.com in expanding much farther its base in China and Southeast Asia and to make a meaningful presence in the European and the United States market.
As per the company officials, the contract initially would not have any big new Google initiatives in China, where the firm’s major services are blocked over its refusal to censor search results in accordance with the local laws.
The investors of JD.com includes Chinese social media powerhouse—Tencent, Walmart and the Chinese e-commerce giant—Alibaba.
Google is expanding its investments throughout Asia, where the middle class is growing at a faster pace and the infrastructure deficiency in retail, finance and other areas have made it a competition ground for the US and Chinese internet giants.
The JD.com investment is being done by the Google’s operating unit rather than by any of the investment vehicles of Alphabet—the parent company.
Google would be getting 271 million newly issued JD.com Class A ordinary shares as part of the agreement. As per the spokesman of JD, it would give Google less than a percent stake in JD.com.
Jianwen Liao—the JD.com’s chief strategy officer said in one of the statement that this contract with Google would open up a wider range of possibilities for offering a superior retail experience for the consumers across the world.
The firm officials said that the contract would bind Google’s market reach and strength with JD.com’s proficiency in logistics and inventory management.