MUMBAI: American multinational technology company, Google, is all set to invest $550 million in China’s second largest e-commerce company JD.com. The move comes as part of the technology giant’s effort to expand its presence in fast growing Asian market.
Under the agreement, Google will receive 27,106,948 newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share, equivalent to $40.58 per ADS, based on the volume-weighted average trading price over the prior 10 trading days.
With this partnership, Google will own less than a per cent stake in the company. Beyond the cash investment, the deal will also include promotion of JD goods on Google’s shopping service. This will also help JD.com expand its base beyond China and Southeast Asia to establish a string presence in U.S. and European markets.
By applying JD’s supply chain and logistics expertise and Google’s technology strengths, the two companies aim to explore the creation of next generation retail infrastructure solutions, with the goal of offering helpful, personalised and frictionless shopping experiences.
In a blog post, Google president of Asia-Pacific Karim Temsamani said, “We want to accelerate how retail ecosystems deliver consumer experiences that are helpful, personalised and offer high quality service in a range of countries around the world, including in Southeast Asia.”
“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 consumers, giving them the power to shop wherever and however they want,” Karim added.
It is noteworthy that Google’s main services are essentially blocked in China ver its refusal to censor search results in line with local laws. For this, Google announced that the agreement initially would not involve any major new Google initiatives in China.
JD.com chief strategy officer Jianwen Liao in an official statement said, “This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world. This marks an important step in the process of modernising global retail. As we celebrate our June 18 anniversary sale, this partnership opens a new chapter in our history.”
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.
