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Google is investing $550 million in cash in Chinese ecommerce company JD.com as part of what it is calling a “strategic partnership.”
According to a press release, this will include marrying Google technology with JD supply chain and logistics to explore the creation of “next generation retail infrastructure solutions, with the goal of offering helpful, personalized and frictionless shopping experiences” in regions like Southeast Asia, the US and Europe.
This investment could be Google’s way of trying to keep up with Alibaba and other Chinese ecommerce platforms.
JD also plans to offer products through Google Shopping.
In a statement, Jianwen Liao, JD’s chief strategy officer, said, “This marks an important step in the process of modernizing global retail.”
In a blog post, Karim Temsamani, president of Asia-Pacific operations at Google, said Asia-Pacific is one of the largest and fastest growing ecommerce marketplaces as consumers in Southeast Asia are expected to spend $88.1 billion online by 2025.
“These consumers in Asia-Pacific are ready to buy, but hard to please,” he wrote. “The growth of access to the internet and online retail has led to rising expectations for top-notch experiences at every step of the shopper’s journey … 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.”
Under the agreement, Google will receive 27 million newly issued JD.com Class A ordinary shares at a price of $20.29 per share.
The release said JD’s retail infrastructure enables consumers to buy whatever they want, whenever and wherever they want it. In addition, the company has opened its infrastructure to partners as part of a Retail as a Service offering.