Google is putting $550 million in a Chinese e-tailer
In Europe and the US, Google doesn’t have much of a shopping presence. Yes, it has a small web store where it sells its Pixel phones, Pixel Buds and Chromebooks, but with Amazon having a stranglehold on Western shopping habits, backing any other horse feels a bit like burning perfectly good money.
In the rest of the world though, it’s a different story, which may explain why Google has put a sizeable $550 million into Chinese e-commerce site JD.com. The site, which also has investment from Walmart and Chinese social media site Tencent, also faces a threat from Amazon, but it’s far less threatening in China, where Alibaba is more of a rival.
For JD.com, the move will likely help the company expand beyond China and Southeast Asia, with promotion on Google’s international shopping services. The marriage of Google’s analytics and market reach, alongside JD.com’s proven skills in logistics and inventory management, feels like a winner.
For Google, other than a general love of money, the initial benefits of a less-than-1% stake are less clear. Google says there will be no major new initiatives in China, where its services are still blocked over a long-standing dispute concerning censorship.
Still, this could just be the beginning of a small portfolio in markets previously overlooked. Google has recently taken a stake in Indonesian ride-hailing company Go-Jek, and it is rumoured that the company is eyeing a similar stake in Indian e-commerce site Flipkart.
“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, chief strategy officer at JD.com.