JD.com, one of China’s leading e-commerce companies, and Google, have announced that Google will invest $550 million in cash in JD.com as part of a strategic partnership.
Google and JD plan to collaborate on a range of strategic initiatives, including joint development of retail solutions in a range of regions around the world, including Southeast Asia, the US and Europe.
The move follows Google’s collaboration with French grocer Carrefour and JD.com’s recent affirmation that it wished to be active beyond Asia.
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, personalised and frictionless shopping experiences, the companies said.
JD also plans to make a selection of products available for sale through Google Shopping in multiple regions.
“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” said JD.com’s Chief Strategy Officer Jianwen Liao. “This marks an important step in the process of modernizing global retail. As we celebrate our June 18 anniversary sale, this partnership opens a new chapter in our history.”
"We are excited to partner with JD.com and explore new solutions for retail ecosystems around the world to enable helpful, personalised and frictionless shopping experiences that give consumers the power to shop wherever and however they want,” said Google Chief Business Officer Philipp Schindler.
RPA Perspective Under the agreements, Google will receive 27,106,948 newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share, equivalent to $40.58 per ADS, based on the volume-weighted average trading price over the prior 10 trading days.
JD.com is China’s leading technology-driven e-commerce company. Its cutting-edge retail infrastructure enables consumers to buy whatever they want, whenever and wherever they want it. The company has opened its technology and infrastructure to partners, brands and other sectors, as part of its Retail as a Service offering to help drive productivity and innovation across a range of industries. JD.com is the largest retailer in China, a member of the NASDAQ100 and a Fortune Global 500 company.
In Madrid earlier this year the Chief Executive of JD.com, Richard Liu, said that Chinese retailers are under pressure to be innovative to meet consumers who demand speed and novelty. He said his company was using drones to deliver to remote villages in China because consumers would not accept the two-day delivery plans offered in Europe.
“In China that would be a disaster. You can get your parcels in six hours,” he said.
JD.com now has 292 million active users and can deliver to 100% of them the same day or the next day, he claimed. More recently the retailer has also opened convenience stores in villages.
Chinese consumers also crave novelty in retail, said Liu. “In Europe, I see a boss running the same store for a dozen years. In China, every guy opens a new one,” said Liu. “The whole world is changing so fast. If you stop innovating even for a year you’ll be out of the game.”
