Google hoping to gain an edge in the e-commerce industry
In an attempt to grow its e-commerce arm and combat giants like Amazon and Alibaba, Google and JD.com announced that they will create a partnership. Google announced that it will invest $550 million in the Chinese e-commerce firm.
The partnership will combine Google’s technological advancements with JD’s knowledge of supply chain management. Moreover, as part of the deal, JD announced that it “plans to make a selection of high-quality products available for sale through Google Shopping in multiple regions.”
However, the deal will not give Google access to Chinese markets, as the tech giant is banned in the country. Indeed, Gmail, Youtube, Google search engine, and Google Maps are all banned by Chinese regulators.
Additionally, this deal is yet another example of its continued expansion in Asia. Google has also invested in Chinese sports streaming firm Chushou and Indonesian ride-hailing company Go Jek. The company will continue to grow in Southeast Asian markets, similar to Amazon and Alibaba.
JD chief strategy officer Jianwen Liao had this to say about the deal:
This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world.
Parent company Alphabet’s (GOOGL) and JD.com’s (JD) stock prices are both up on Monday, rising 2.1% and 0.4%, respectively. JD.com is up almost 118% in the past five years, showing that Google is investing in a clearly strong, rising company.
Google and JD have a long way to go before they catch Amazon or Alibaba, but this investment is a large step in the right direction for the two firms.
Featured image via Flickr/Daniel Cukier