Google has unveiled plans to invest $550 million in JD.com, as the tech giant looks to profit from the fast-growing e-commerce market in Asia.
According to Google, consumers in Southeast Asia are expected to funnel $88.1 billion into the e-commerce market by 2025, revenue that Google now stands to benefit from.
As part of the part of the partnership, Google will gain insight into the Chinese e-commerce company’s supply chain and logistics network, while JD.com will get access to a global network of consumers as its products will reportedly appear on Google’s shopping service.
“We’re excited to announce a new strategic partnership with JD.com, one of the world’s largest e-commerce companies,” said Karim Temsamani, the president of Google’s Asia-Pacific operations.
“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 Southeast Asia,” he said.
According to Temsamani, the global tech giant is invested in applying JD.com’s supply chain and logistics expertise with Google’s technology to explore new ways to revolutionise consumer shopping experiences, “giving them the power to shop wherever they want and however they want”.
Since the strategic partnership between Google and JD.com was announced on Monday, speculation has circled that Google could be targeting JD.com to regain its footing in China, as the site began exiting the market in January of 2010 after a hacking attack meant that Google, and other US tech companies were hesitant to censor search results to meet Chinese legislation. By 2014, Google services like Gmail and Chrome had become unavailable to Chinese users.
Since then, the tech company has attempted to re-enter the market with its work in artificial intelligence, however, its partnership with JD.com will mark one of the biggest footholds the company has had since withdrawing the bulk of its services in 2014. The deal also comes at an interesting time, as tension escalates between America and the US over trade tariffs. Regardless of its motivations, Temsamani is confident the new partnership will prove fruitful for both parties.
“We’re thrilled to partner with JD.com to explore new opportunities to make online shopping even easier for consumers around the world.”
Google will reportedly receive 27.1 million JD.com Class A ordinary shares as part of the deal.
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