Google inks $550M Strategic Pact with Chinese E-Commerce Firm JD.com


Published Date : Jun 18, 2018

The advent of automation technologies seems to pave way for new disruptions in the retail and e-commerce industry in emerging and developed markets. This has opened new grounds for infusing substantial funds by technology companies and venture capital firms and enter into strategic tie-ups with retail players. Investors from developed regions are betting big on emerging economies such as in Asia, notably China, to prove their global might. Against this background, the technology giant Google, announced on June 18, 2018 that it has entered into a strategic collaboration with JD.com, Inc., a China-based e-commerce behemoth under with which it will invest $550 million in the latter.

The move is a part of its efforts to expand its reach in China, which will enable to counter the inroads made by its rival Amazon.com. Under the collaboration, Google will be purchasing 27.1 million newly issued Class A ordinary shares of JD.com.

Collaboration to support Google to build on Strategic Initiatives in China, making way for Innovative Retail Experiences  

Google has made in Asia and China has been its leading priority for quite some time now. It has already made sizeable investments in the country, launching new products and opening its offices there. However, this tie-up is different from all others and it will see the two companies engage in a series of strategic initiatives outside of China. In particular, the companies are planning to collaborate on the development of innovative retail solutions in the U.S., and various parts of Europe and Southeast Asia.

Tie-up combines Google’s strength in Analytics with JD.com’s Technical Expertise in Logistics

Google nurses ambitions to consolidate its presence in Asia for which it is stepping up partnerships with several regional retail companies. The collaboration will enable the U.S.-based technology giant to offer more engaging and better experience to consumers across the globe. Of note, it will offer customers JD.com products for sale on its Shopping platform. The Chinese player boasts of large expertise in a wide range of automated warehouse technologies and the deal will give Google access to its strength logistics and inventory management.

On the other hand, the tie-up is likely to endow JD.com substantial synergetic benefits as well. It is looking to offer a tough competition to Alibaba in it home turf, notably backed by Japan’s Softbank Group Corp.