Google has agreed to invest $550 million in Chinese e-commerce firm JD.com in order to increase its presence in Chinese market.
Google has been employing diverse measures to increase its market presence in China in the recent years. For the same, the company has announced today that it would scale up its initiatives for market presence in China by realizing a strategic partnership with JD.com, a Chinese e-commerce firm. Under the agreement, Google would invest $550 million in JD.com.
In the past, Google has undertaken various investments in the Chinese market alongside releasing products and opening offices which include an AI hub. However, the company is presently working with JD.com in the external context of the Chinese market. According to a joint presser, they have agreed for collaboration on a variety of initiatives that would also involve development of retail solutions in the US, Southeast Asia, and Europe.
The primary objective for the collaboration between Google and JD.com is directed towards merging the aspects of customer marketing, reach and data of Google and the technology and experience of JD.com in logistics and supply chain, for development of new variants of online retail. The supply chain and logistics of JD.com are characterized by advantages which could be validated on the grounds of an example of its warehouses in China which employ robots rather than human workers.
In the initial stage of the collaboration, the products of JD.com would be presented for sale on the Google Shopping platform throughout the globe. However, both the companies have different collaborations in the pipeline that would be realized soon. JD.com is presently valued at approximately $60 billion according to the company’s share price on NASDAQ. It has engaged in prolific partnerships such as with Wal-Mart alongside ensuring substantial investments in drones as well as automated warehouse technology and variety of ‘next generation’ alternatives in logistics and retail.
The initiative of a distribution platform like Google to support the service provider such as JD.com is accountable for productivity owing to the relationships of the former with a diverse range of e-commerce organizations such as Alibaba which is accounted as a notable rival of JD.com.
It is also imperative to note that Google has augmented its investments throughout markets in Asia which is characterized by an increased share of the middle class in the population as well as on infrastructure, in finance, retail, and other aspects thereby making them a plausible target for Chinese and US internet giants.