Tech giant Google said Monday it will invest $550 million in cash into JD.com. 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.
The two companies described the investment announced on Monday as one piece of a broader partnership that will include the promotion of JD.com products on Google’s shopping service. For its part, JD.com said it planned to make a selection of items available for sale in places like the U.S. and Europe through Google Shopping — a service that lets users search for products on e-commerce websites and compare prices between different sellers.
The Chinese e-commerce company competes aggressively with Jack Ma’s Alibaba in China’s massive e-commerce market. Both companies have invested significantly in technology, retail and logistics to win over consumers.
For example, JD.com had been testing out drone delivery services to reach China’s rural consumers while keeping the logistics cost relatively low.
The e-commerce player also has the backing of another major Alibaba rival — Chinese tech giant Tencent, which is involved in business areas including social networks, digital payments and gaming. It also operates China’s largest social messaging platform, WeChat.
In the past year, Google has partnered with Walmart on multiple fronts. In August 2017, the two companies joined forces to offer hundreds of thousands of Walmart items on Google’s voice-controlled Google Assistant platform to counter the dominance of Amazon in the voice shopping market.