Google will invest $550 million in cash in China’s JD.com Inc. as the U.S. search giant pushes deeper into online commerce.
As part of a strategic partnership, Google will put $550 million in cash into JD.com, the companies said in a statement. In return, Google will receive more than 27 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share.
That’s equivalent to $40.58 per American depository share based on the volume-weighted average trading price over the prior 10 trading days. JD.com listed American depository shares in its group company on the Nasdaq in 2014.
The two tech companies said they would work together to develop retail infrastructure that can better personalize the shopping experience and reduce friction in a number of markets, including Southeast Asia.
Also, the deal comes just a week after Google struck an alliance with Carrefour SA to sell groceries online in France through the U.S. company’s platforms including Home and Assistant.
“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.
When retailers partner with Google, it gives their products visibility and makes it convenient for consumers to purchase them online. For the tech giant, its shopping service is important in helping to win back product searches from Amazon and to stay relevant in the voice-powered future of e-commerce.
The partnership would open a channel for JD.com to sell to consumers outside China, especially at a time when trade tensions between Beijing and Washington are high.
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.”
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