In recent months, Google has been making inroads back into the Chinese market through various deals and investments. The latest involves a strategic partnership with JD․com — China’s second largest e-commerce company — to the tune of $550 million.
JD․com is a major Amazon-like player in China — second only to Alibaba — with a significant footprint in Southeast Asia. According to estimates, people living in the region will spend $88.1 billion online by 2025 due to the growth of internet access and web retail.
We want to accelerate how retail ecosystems deliver consumer experiences that are helpful, personalized and offer high quality service in a range of countries around the world, including in Southeast Asia. By applying JD․com’s supply chain and logistics expertise and our technology strengths, we’re going to explore new ways retailers can make shopping effortless for their consumers, giving them the power to shop wherever and however they want.
The deal is aimed at creating a more “personalized” shopping experience for new and future users coming online. Google will leverage its “technology strengths” and combine it with JD․com’s supply chain and logistics. According to Reuters, Google will receive 27.1 million Class A ordinary shares in JD․com, resulting in a less than one percent stake.
Meanwhile, JD․com will bring high-quality products to other parts of the world through Google Shopping. This includes U.S. and European markets, with products from the Chinese retailer appearing in relevant Google Search results.
Google has been rapidly expanding its Shopping product in light of Amazon purchasing Whole Foods last year. A report from CNBC this weekend highlighted how that particular acquisition was a “real wake-up call” that prompted the likes of Costco, Target, and Walmart to partner with Google. From products appearing via the Assistant and Google Shopping to universal shopping carts, even European retailers have begun to partner with Google to combat Amazon.
Today’s JD․com strategic partnership reflects how Google is slowly increasing its presence in China. Other deals include one with WeChat’s Tencent earlier this year, while on the consumer front Google just launched Files Go and ARCore through local app stores.