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Google invests $550 million in JD.com strategic partnership with overseas focus
JD.com and Google have announced that Google will invest $550 million in cash into China’s largest retailer as part of a strategic partnership. The companies hope to explore retail opportunities together in Southeast Asia, the US and Europe and certain products will be made available on Google Shopping, according to an announcement released on JD’s summer mega sale day, ‘618’ or June 18, the anniversary of the company’s founding in 1998.
Although Google is blocked in JD’s homeland and main market, China, the partnership recognizes the technical prowess of the US tech giant and hopes to merge it with JD’s supply chain and logistics skills and scale.
“We are excited to partner with JD.com and explore new solutions for retail ecosystems around the world to enable helpful, personalized and frictionless shopping experiences that give consumers the power to shop wherever and however they want,” the release quotes Google Chief Business Officer Philipp Schindler as saying.
“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” said JD.com’s Chief Strategy Officer Jianwen Liao.
Google is in competition with Amazon for e-commerce traffic and has struggled with anti-trust cases over its Google Shopping service in the EU. JD has already made inroads into Southeast Asia and Europe with its international version JoyBuy, and has existing strategic agreements with multiple online partners such as Tencent, Baidu, NetEase and Toutiao to funnel traffic and make shopping easier.
Google will receive more than 27.1 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share. That’s the equivalent of $40.58 per American depository share (ADS) based on the volume-weighted average trading price over the prior 10 trading days, according to the statement. JD.com listed American depository shares in its group-level company on the Nasdaq back in 2014 and became a Nasdaq100 company. Before this announcement, JD’s current top investors were Tencent at around 20% and Walmart at around 10%.