Google to Invest $550 Million in China e-Commerce Site JD

Google is investing $550 million in cash in China’s JD as the U.S. search giant pushes deeper into online commerce, according to Bloomberg.

Google will buy newly issued Class A shares at $20.29 per share, equivalent to $40.58 per ADS, the companies said in a joint statement. The pair plan to explore joint development of retail solutions in regions, including Southeast Asia, the U.S. and Europe. The deal comes just a week after Google struck an alliance with Carrefour to sell groceries online in France through the U.S. company’s platforms including Home and Assistant.

The flurry of activity signals Google’s growing ambitions in e-commerce. The French partnership will allow consumers to order staples through Google services on their smartphones, tablets or other devices. The latest deal is aimed at combining JD’s expertise in logistics and supply chain with Google’s technology to experiment with changes in how people shop.

"We are excited to partner with JD 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,“ Philipp Schindler, Google chief business officer, said in the statement.

One of the draws for Google is that JD has its own fulfillment and logistics network, similar to Amazon, said Bloomberg intelligence analyst Jitendra Waral. JD offers Google a more scalable infrastructure than that of other China-based e-commerce monoliths such as Alibaba, which focus more on listings.

Retail is the biggest advertising area for Google, and the search giant’s spending on e-commerce is likely to increase, Waral said. The partnership represents Google’s push to develop a long-term defense strategy against Amazon’s ad-market with two main goals: to retain their strength in retail advertising, and to expand into a bigger addressable market.

The partnership with JD will likely serve as a benchmark for other retailers fighting against Amazon, as it will make it easier for Google to sell ad and cloud services and AI tools down the line. Google and JD have already teamed up elsewhere. They both participated in the latest funding round of Indonesia’s Go-Jek, a challenger in the ride-hailing business in Southeast Asia.