U.S. Tech giant Google announced on Monday that it will invest $550 Mn in China’s online shopping behemoth and Alibaba’s main rival JD.com. The strategic investment is seen as part of Google’s ongoing effort to increase its investment footprints across fast-growing Asian markets.
As part of the deal, JD.com will be permitted to promote its products on Google’s shopping services, which may help the Chinese e-tailer in making a much needed breakthrough in the highly competitive U.S. and European markets.
It is still not clear that whether Google’s parent company Alphabet Inc will invest directly in JD.com or through one of its investment arms. The investment proceedings will be initiated after JD.com allots 27 million Class A ordinary shares at an estimated price of $20.29 per share to the tech giant.
With eye on profits, over the years JD.com has been relentlessly trying to make a foray beyond its traditional markets of China and Southeast Asian market. The company has also massively invested in new age technology like drone delivery services to ensure that its products can be delivered to every nook and corner of China.
One of the celebrated backers of the online retail giant is the Chinese internet giant Tencent, which owns popular chatting app WeChat and is equally an aggressive rival of Alibaba.
Meanwhile, Google is steadily increasing its presence across the Asian markets through investment in several promising companies and startups. Earlier this year, it picked up a stake in Indonesia based ride-hailing company Go-Jek and is also said to be in talks to pick up minority stake in Indian e-tailer Flipkart.
Investment in JD.com again brings forth Google’s love-hate relationship with China. A lucrative Asian market where the Silicon Valley company continues to invest, but where all its services are still banned owing to censorship issues.