On June 18, Alphabet’s Google and China’s largest e-retailer by revenue, JD.com, announced they had entered into a strategic partnership. The half-billion-dollar investment is the latest move by Google to enlarge its footprint in e-commerce, as well as in Asian markets.
With Google’s new stake – worth $550m in shares – the Silicon Valley behemoth looks set to expand its presence in the fast-growing Asian market, where increasing purchasing power and access to the internet is causing online retail activity to explode. Asia is also the stage for increasing competition with other global e-commerce rivals, such as Amazon.
The deal will allow JD.com to showcase its products on Google’s shopping service (which has a global reach), while Google will be able to leverage JD.com’s supply chain and logistics. The companies have said that, by merging their capabilities, they aim to explore new solutions in retail infrastructure, as well as offer “helpful, personalised and frictionless shopping experiences”.
The deal aims to explore new solutions in retail infrastructure, as well as offer “helpful, personalised and frictionless shopping experiences”
“The Asia-Pacific [APAC] region is one of the largest and fastest growing e-commerce marketplaces in the world,” said Google’s APAC head, Karim Temsamani, in a company blog post. “People in South-East Asia alone are expected to spend $88.1bn online by 2025.
“These consumers… 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.”
The move continues a recent pattern of Google investment, which has seen the company expand its online retail channels in international markets, as well as increase its foothold in the burgeoning APAC region.
The partnership with JD.com comes just a week after Google announced a strategic agreement with French supermarket chain Carrefour, which seeks to develop the French company’s retail distribution channels in Europe to include smartphones, tablets and other smart devices.
In Asia, meanwhile, Google recently signed a patent-sharing agreement with Tencent, which allows the US company to access the Chinese market without its own technology being blocked by the government, and invested in Go-Jek, one of the most popular ride-hailing apps on the continent.