Google buys US$550 million stake in JD

Google is to invest US$550 million in JD, giving it an expanded interest in China, where its operations are stunted by a local ban.

The investment, from Google’s main operating division rather than its entrepreneur-focused investment arm, will lead to broader cooperation, including the promotion of JD products on Google’s shopping service outside Mainland China. Despite the value of the investment, Google buys less than 1 per cent of JD.

But it’s enough to strengthen Google’s partnership with Walmart and Chinese social media and internet ecosystem operator Tencent, both of which are cornerstone shareholders in JD. Analysts say the investment will help JD challenge challenge the dominance of archrivals Alibaba and Amazon in key international markets.

Partnering with Google will help JD broaden its operations beyond its current core markets of China and Southeast Asia, including into the US – where its shares are listed – and Europe.

Google said there would be no new products in Mainland China, where its operations are restricted because it won’t comply with government requirements to censor search results.

JD executives said the deal would see JD’s expertise in logistics and inventory management merge with Google’s market reach and strength in analytics.

“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.

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