Google has announced yet another high profile investment. The search giant is expected to invest more than half a billion dollars in China’s e-commerce player, JD.com. As part of the deal, Google will be issued 27 million new JD.com Class A ordinary shares with a value of $20.29 per share.
The two companies are currently at loggerheads in Southeast Asian markets. The new round of investment is expected to reduce the friction. It is quite likely that both the companies will collaborate and offer personalized shopping experience. As far as JD.com is concerned, the company will now list certain items that are exclusive to the American and the European market. It will make use of Google Shopping, a service that lists and compares products between different e-commerce websites.
The Google partnership is also expected to increase the visibility for JD.com. As per a recent report, Google has been helping Amazon achieve better sales with its search engine. All said and done, eventually, deals like this are expected to reflect positively on Google’s Digital Advertising Revenue. Furthermore, this will also help JD.com score some brownie points when it comes to voice-powered e-commerce.
JD.com started out as 360Buy in 1998. The e-commerce company has scaled to new heights and is currently the largest Chinese retailer by revenue. It was one of the first Chinese e-commerce companies that controlled the logistics network in order to increase the leverage of their supply chain. Interestingly, JD has also been working with Walmart with the latter handing over its Chinese e-commerce business in exchange for 5% equity stake. It is also worth mentioning that JD.com is an e-commerce company that directly rivals with Jack Ma’s Alibaba.
Richard Liu, CEO, and founder of JD.com has recently expressed his concern over the freshly brewing trade war between the US and China. It is for this reason that JD.com has put a pause to its U.S expansion plans.