Google will invest $550 million in cash in Chinese e-Commerce giant JD.com. By combining JD.com’s supply chain and logistics with Google’s technology, the two companies will collaborate to develop retail infrastructure designed to better personalize the shopping experience and reduce friction in several markets, including Southeast Asia.
As part of the partnership, JD.com will join Google Shopping and offer a curated selection of products to consumers across multiple markets outside China, including the U.S. and Europe. Major U.S. retailers such as Target, Walmart, Costco, The Home Depot and Ulta Beauty are already listed on Google Shopping, a service that lets users search for products listed on various e-Commerce sites and compare prices among different sellers.
Google’s move comes as JD.com continues to challenge China’s top e-Commerce player, Alibaba. Alibaba already has made major efforts to build out partnerships both foreign and domestic to shore up the company’s supply chain, delivery and technology efforts.
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When retailers partner with Google, it increases their product visibility on the search engine and makes it convenient for shoppers to purchase them online. On the other hand, Google leverages the service to help win back product searches from Amazon and to grow its share of voice-powered e-Commerce.
The agreement will not involve any major new Google initiatives in China, where the company’s main services are blocked due to its refusal to censor search results in line with local laws. But despite the Chinese barriers, Google is seeking to increase investments across Asia, which is becoming a hotbed for international competition.Google recently took a stake in Indonesian ride-hailing firm Go-Jek, and it may also invest in Indian e-Commerce upstart Flipkart, according to Reuters.
Other JD.com investors include Walmart and Tencent Holdings Ltd, the archrival of Alibaba.The retailer’s partnership with Tencent allows it to sell directly to consumers through the WeChat app.
