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Google to Invest $550 Million in JD.com

June 20, 2018

Google plans to invest $550 million in the Chinese e-commerce giant JD.com in a bid to enhance its presence in China’s (and South-East Asia’s in general) red hot e-commerce market. According a press release issued by JD.com, this forms a part of a greater “strategic partnership” which will see Google buy a $550 million cash stake in JD.com in return for over 27 million JD.com Class A shares, or an approximately 1% share in the company.

For its part, JD.com will join Google Shopping, Google’s online shopping portal which allows users to search for and compare products across multiple sellers in various countries. In its own press release, Google’s President of Asia-Pacific Operations Karim Temsamani says that this will “bring a selection of [JD.com’s] high-quality products to consumers in multiple regions around the world.”

Google and JD.com also declared their commitment to improve global retail infrastructure, stating that “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, personalized and frictionless shopping experiences.”

As China’s second largest e-commerce company, JD.com has been making a strong push lately in the development of its fresh food capabilities and Google’s investment looks to further boost these efforts. JD.com has recently reaffirmed its commitment to standardize, integrate, and innovate along the entire length of the fresh food supply chain. Additionally, according to 7Fresh CEO and president of JD’s fresh division Wang Xiaosong, 50 stores under the 7Fresh brand of high-end, hi-tech supermarkets will be opened in 2018, with more than 500 store openings expected over the next three to five years.

7Fresh is JD.com’s response to its rival Alibaba Group’s own brand of high-end Hema supermarkets and represents its overall challenge to Alibaba’s position as the leader in China’s immense and lucrative e-commerce market. 7Fresh aims to leverage JD.com’s significant technological capabilities to manage and optimize its supply chain, providing fresher food quicker to consumers. It also offers consumers 30-minute home delivery with a several kilometre radius and cooked meals prepared on-site by highly trained chefs. 7Fresh is also expected to rollout a series of ‘smart shopping carts’ in its stores which will be able to automatically provide information about a product, such as its origin, sourcing, and nutritional details, on a touchscreen display on the user’s shopping cart, offering customers a personalized shopping experience and greater control over the products they purchase.

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