Google may be banned from mainland China, but that isn’t stopping it from investing big in the global expansion of Chinese e-tailer JD.com.
The announcement of Google’s $550 million investment in JD.com today states that new initiatives from the deal won’t be launched in China, but will rather include featuring JD.com product listings on Google Shopping in other parts of the world.
With the second-largest share of China’s B2C e-commerce market after Alibaba’s Tmall, JD.com already sells most major multinational consumer brands within China. Among CPG brands, 100% of home care and 95% of personal care brands are present on the platform. Gartner L2’s recent Digital IQ Index: Beauty China finds that 97% of mass beauty brands are sold on JD.com, either through brand flagships or JD.com-operated stores. Premium beauty brand presence is slightly lower at 77%. International luxury brands have generally been more wary of mass-market e-tailers, but JD.com has scored major names like Saint Laurent and Alexander McQueen since the launch of its luxury app Toplife and white-glove delivery service.
The Google deal comes after both Google and JD.com partnered with Walmart in the US and China, respectively. Google teamed up with Walmart to take on Amazon by placing Walmart product listings on Google’s Alexa competitor Google Assistant, while Walmart relies heavily on JD.com in China for online orders and delivery logistics.
JD.com CEO Richard Liu announced in January that the company was seeking funds to set up logistics in the US, with a focus on the Chinese diaspora in Los Angeles. The announcement of a new strategic partnership forged between Google and JD.com has a much wider scope, stating that the companies will focus on Southeast Asia, the US, and Europe.
JD.com is competing with China’s largest e-commerce company Alibaba in the rush for global expansion as Alibaba invests in e-commerce companies and opens new Alibaba Cloud data centers worldwide. Its payment arm Ant Financial has been concurrently making global investments in payment firms, but a recent attempt to do so in the US was thwarted when the government rejected Ant Financial’s acquisition of MoneyGram on national security terms.
Also part of this fray of international tech alliances is tech giant Tencent, which is aligned with JD.com in China as part of the battle against Alibaba. Tencent and Walmart are both investors in India’s largest online retailer Flipkart, while Alibaba has made several India investments including e-tailer Snapdeal. Technology may be shrinking the world, but tech giants are only getting bigger.