Apple News Facebook Twitter 新浪微博 Instagram YouTube Wednesday, Mar 15, 2023
Search
Archive
English>>

Google's investment in JD.com is a win-win deal: analysts

By Dong Feng (People's Daily)    09:12, June 19, 2018

Chinese e-commerce shopping site JD.com announced Monday it has secured investment worth $550 million from Google. Experts find the strategic partnership a win-win deal.

The companies said that both sides will roll out a series of cooperation programs, including developing retail solutions in multiple regions such as Southeast Asia, the United States and Europe. Experts find the deal will help JD.com expand globally and help Google ease the pressure from Amazon’s recent growth.

As partners, both companies will focus on building next-generation retail infrastructure solutions to provide consumers with a better shopping experience.

JD.com becomes global business

The overall strategy of JD.com in 2018 shows the company’s ambition to become a global business.

Experts note JD.com has enhanced its capability to compete.

“JD.com has undoubtedly built a strong supply chain system. This is JD.com’s core competitiveness,” Cao Lei, director of the Hangzhou-based China e-Business Research Center, told the People’s Daily on Monday.

This supply chain covers end-to-end circulation that includes commodity selection using big data, procurement, operations, warehousing, distribution, technical support, financial systems and after-sales services, Cao added. 

JD.com is shaping up to be an integrated supply chain that also offers third-party services. After building up its supply chain internally, the platform is now attracting Internet giants such as Google, Cao noted.

Before the long weekend holiday celebrating the Dragon Boat Festival, Liu Qiangdong, founder of JD.com, said that the company will provide Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) countries with e-commerce, logistics, and financial services in the next two years.

Under the Belt and Road initiative, JD.com will contribute to the growth of the digital economy in Southeast Asian countries, and improve local people’s quality of life, Liu continued.

JD.com is planning to deploy cross-border retailing, so its partnership with Google might help.

Google’s buffer

Both Google and Amazon are two giants in the global Internet business. Google has been growing stronger than Amazon in terms of market value. However, the market landscape has been disrupted this year.

In the past year, Amazon’s stock price has risen by around 75 percent. From e-commerce to cloud computing, it has been growing through developing new business in new regions.

Google might have started to follow suit this year.

By inking a partnership with Carrefour, Google has moved into French retail and potentially come across a new anti-Amazon strategy.

Carrefour is the first retailer partnering with Google in France to offer a new grocery shopping experience, which will be available in early 2019 through the Google Assistant, and connected speakers like Google Home.

Starting in 2019, Carrefour will sell products through Google's products and services, including Google Home smart speakers and Google Assistant voice assistants. This cooperation marks the first time that French retail companies have sold groceries through Google's services.

Analysts predict that Amazon will develop a retail search tool and win over Google in this area. As time goes by, consumers might become accustomed to using Amazon as a retail search engine instead of Google.

Google aims to increase its market share by selling JD.com’s products through Google shopping. Chances are JD.com might adopt a strategy similar to the partnership of Carrefour with Google, completing the sale of JD.com products through Google's connected speakers.

“Google is strong with its technical capabilities and massive user base. When these two companies work together, they can create better online and offline user experience, this is exactly the model for cross-border retail that JD.com is seeking,” Cao said.

“Meanwhile, the user scenario for Google has been enriched, increasing the rate for sales and creating more revenue. JD.com will stride into the global market with a lower marketing cost,” Cao concluded. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Bianji)

Add your comment

Related reading

We Recommend

Most Read

Key Words