INTERNATIONAL - Google will invest $550million (R7.4billion) in Chinese e-commerce powerhouse JD.com, part of the US internet giant’s efforts to expand its presence in fast-growing Asian markets and battle rivals, including Amazon.com.
The two companies described the investment as one piece of a broader partnership that will include the promotion of JD.com products on Google’s shopping service. This could help JD.com to expand beyond its base in China and South-east Asia and establish a meaningful presence in US and European markets.
Company officials said the agreement initially would not involve any major new Google initiatives in China, where the company’s main services are blocked over its refusal to censor search results in line with local laws.
JD.com’s investors include Chinese social media powerhouse Tencent Holdings, the arch-rival of Chinese e-commerce leader Alibaba Group Holding, and Walmart.
Google is stepping up its investments across Asia, where a rapidly growing middle class and a lack of infrastructure in retail, finance and other areas have made it a battleground for US and Chinese internet giants. Google recently took a stake in Indonesian ride-hailing firm Go-Jek.
The JD.com investment is being made by the operating unit of Google rather than one of parent company Alphabet’s investment vehicles.
Google will get 27.1million newly issued JD.com Class A ordinary shares as part of the deal.
This will give it less than a 1percent stake in JD, a spokesperson for JD said.
For JD.com, the Google deal shows its determination to build a set of global alliances as it seeks to counter Alibaba, which has been more focused on forging domestic retail
tie-ups.