Technology

Google, JD.com Announce Strategic Partnership

Deal seeks 'next-generation' retail in multiple regions including U.S.
Photo by WGB Staff

Google on Monday announced a $550 million investment in Chinese e-commerce company JD.com with the intention of jointly developing retail solutions worldwide, including in the U.S.

The companies said the partnership will combine JD’s supply chain and logistics expertise with Google’s technology strengths “to explore creation of next-generation retail infrastructure solutions, with the goal of offering helpful, personalized and frictionless shopping experiences.” JD also plans to make a selection of its high-quality products available for sale through Google Shopping in multiple regions.

The deal also represents a tighter knit between Google, Walmart and JD as those companies separately and through various partnerships aim to chase down Amazon, the world’s largest online retailer. Walmart in 2016 acquired approximately 5% of JD’s shares in a deal whereby the latter took over Walmart’s e-commerce operations in China, where JD is the country’s largest online retailer. Walmart made a separate deal with Google last year that enables Walmart customers to link accounts to a suite of Google technologies, allowing for voice-enabled shopping through Google Assistant, Google Home and the Google Shopping Express website or app.

“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” said Jianwen Liao, JD.com’s chief strategy officer. “This marks an important step in the process of modernizing global retail. As we celebrate our June 18 anniversary sale, this partnership opens a new chapter in our history.”

JD is a $55.7 billion online retailer and technology noted for its leadership in logistics and fulfillment, including development of automated distribution centers, unmanned stores and drone deliveries in its home country.

"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,” said Google Chief Business Officer Philipp Schindler.

Under the agreements, Google will receive 27 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share. That would represent less than 1% of JD.com’s outstanding shares.

Google and JD said they plan to collaborate on a range of strategic initiatives, including joint development of retail solutions around the world in areas such as Southeast Asia, the U.S. and Europe. JD has intentions of expanding from its China base. Google in the meantime reportedly has its search engine and other technologies blocked in China, but it was not immediately clear whether the deal could affect Google's presence there.

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