Google Sinks $550M into Chinese E-Commerce Co.

Beijing--Google announced this week that it is investing half a billion dollars in cash in JD.com, the e-commerce website that is the largest retailer in China.

The $550 million investment is part of a strategic partnership between the California tech company, which wants to challenge Amazon, and the e-tailer, which counts Alibaba among its main competitors and another Amazon rival, Walmart Inc., among its investors.

The companies said they plan to collaborate on a range of strategic initiatives that combine JD’s expertise in supply chain and logistics with Google’s tech know-how to offer “helpful, personalized and frictionless shopping experiences” in the United States, Europe and Southeast Asia.

“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” JD.com Chief Strategy Officer Jianwen Liao said in a news release. “This marks an important step in the process of modernizing global retail.”

The investment also gives Google a foothold in China, with the tech company’s president of Asia-Pacific operations, Karim Temsamani, writing on the tech company’s blog: “The Asia-Pacific region is one of the largest and fastest-growing e-commerce marketplaces in the world. People in Southeast Asia alone are expected to spend $88.1 billion online by 2025.

“These consumers in Asia-Pacific are ready to buy, but hard to please. The growth of access to the internet and online retail has led to rising expectations for top-notch experiences at every step of the shopper’s journey.”

And it gives JD.com an entryway into the U.S. and European markets, as the investment allows for JD.com to sell a “curated selection of high-quality products” through Google Shopping in multiple regions.

What the partnership will not include is any new Google initiatives in China, Reuters reports, as the company’s main services remain blocked there because it refuses to censor results in accordance with local laws.

Under the agreements, Google will receive 27.1 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share; Google will effectively own less than 1 percent of JD.com.