UPDATED 08:28 EDT / JUNE 18 2018

APPS

Google invests $550M in Chinese e-commerce giant JD.com

Google Inc. will invest $550 million in China’s second largest e-commerce firm JD.com, a move that will give the company a bigger presence in the Asian market and potentially bolster its position against Amazon.com Inc.

For its investment, Google will receive 27 million newly-issued class A ordinary shares in JD.com, which will give Google a less than 1 percent share in the company.

In return, JD.com’s products will be promoted on Google’s shopping service, giving it more of a presence outside its stronghold in the China and Southeast Asia markets. The Chinese giant will also be hoping to make a dent in the empire of China’s e-commerce king, Alibaba Group Holding Ltd.

Reports said the deal won’t mean Google entering into any new initiatives in China, where most of its services are persona non grata over its refusal to censor search results in accordance with the laws of the land.

“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” Jianwen Liao, JD.com’s chief strategy officer, said in a statement.

“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, personalized and frictionless shopping experiences,” Liao added.

Google Chief Business Officer Philipp Schindler more or less mirrored that statement, adding that the impetus is to give consumers “the power to shop wherever and however they want.”

As for the possibility of a trade war with China, JD.com Founder and Chief Executive Officer Richard Liu told CNBC that such a thing would be “horrible.” As Liu sees it, more consumers are going to be doing their shopping online in the future and many of those goods will be imported. A protracted trade war would throw a wrench into the works, something that Liu said has been of some concern to him of late when thinking about expansion into the West.

Image: Daniel Cukier via Flickr

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