Google plans to invest $550 million in Chinese ecommerce marketplace JD.com in an effort to expand its presence in Asia and help JD.com better compete with main rival and regional leader Alibaba. The two companies will also jointly develop retail solutions in Southeast Asia, the U.S. and Europe.
“By applying JD.com’s supply chain and logistics expertise and our technology strengths, we’re going to explore new ways retailers can make shopping effortless for their customers, giving them the power to shop wherever and however they want,” said Karim Temsamani, President of Asia-Pacific Operations for Google in a press release.
JD.com will also be able to sell products on Google Shopping, while Google will have access to JD.com’s extensive logistics and supply chain services. Google’s search engine is still blocked in China, according to Reuters, over its refusal to adhere to Chinese laws over censorship of search results.
JD.com has been investing significantly in supply chain automation and robotics in China, including a warehouse in Shanghai that employs four people and pumps out over 200,000 orders a day. Combined with Google’s AI, rich data and analytics and universal reach, it could be a formidable pairing.
“This is an exciting move and a big win-win, offering Google the potential to address Amazon’s dominance while giving JD.com the ability to launch its offerings in North America and Europe,” said Oliver Guy, Senior Vice President of Retail for Software AG.
Second to Alibaba in China, JD.com’s investors include Alibaba rival Tencent Holdings, which developed the popular WeChat messenger app.