Google is investing $550 million in cash in China’s JD.com Inc as the US search giant pushes deeper into online commerce.
Alphabet Inc’s Google will buy newly issued Class A shares at $20.29 per share, equivalent to $40.58 per ADS, the companies said in a joint statement Monday. The pair plan to explore joint development of retail solutions in regions, including Southeast Asia, the US and Europe. The deal comes just a week after Google struck an alliance with Carrefour SA to sell groceries online in France through the US company’s platforms including Home and Assistant.
The flurry of activity signals Google’s growing ambitions in e-commerce. The French partnership will allow consumers to order staples through Google services on their smartphones, tablets or other devices. The latest deal is aimed at combining JD’s expertise in logistics and supply chain with Google’s technology to experiment with changes in how people shop. “We are excited to partner with JD.com and explore new solutions for retail ecosystems around the world to enable helpful, personalized and frictionless shopping experiences that give consumers the power to shop wherever and however they want,” Philipp Schindler, Google chief business officer, said in the statement.
Google and JD have teamed up elsewhere. They both participated in the latest funding round of Indonesia’s Go-Jek, a challenger in the ride-hailing business in Southeast Asia. JD, which competes with giant Alibaba Group Holding Ltd, came under fire last month by a hedge-fund manager, who called China’s No. 2 e-commerce operator over-valued and criticized its ‘silly’ investments. Kok Hoi Wong, chief investment officer for APS Asset Management Pte, said his own internal valuation for the $63 billion company was ‘a tiny figure’.
JD shares fell after the attack, but have more than recovered since then. JD was little changed in US trading on Friday at $43.59.