Google has been increasing its presence in China in recent times, and today it has continued that push by agreeing to a strategic partnership with e-commerce firm JD.com, which will see Google purchase $550 million worth of shares in the Chinese firm.
Google has made investments in China, released products there and opened offices that include an AI hub, but now it is working with JD.com largely outside of China. In a joint release, the companies said they would “collaborate on a range of strategic initiatives, including joint development of retail solutions” in Europe, the U.S. and Southeast Asia.
The goal here is to merge JD.com’s experience and technology in supply chain and logistics — in China, it has opened warehouses that use robots rather than workers — with Google’s customer reach, data and marketing to produce new kinds of online retail.
Initially, that will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the word, but it seems clear that the companies have other collaborations in mind for the future.
JD.com is valued at around $60 billion, based on its NASDAQ share price, and the company has partnerships with the likes of Walmart and it has invested heavily in automated warehouse technology, drones and other “next-generation” retail and logistics.
The move for a distribution platform like Google to back a service provider like JD.com is interesting since the company, through search and advertising, has relationships with a range of e-commerce firms, including JD.com’s arch rival Alibaba.
But it is a sign of the times for Google, which has already developed relationships with JD.com and its biggest backer Tencent, the $500 billion Chinese internet giant. All three companies have backed Go-Jek, the ride-hailing challenger in Southeast Asia, while Tencent and Google previously inked a patent-sharing partnership and have co-invested in startups such as Chinese AI startup XtalPi.