Google will invest $550 million for less than 1 percent stake in China-based e-commerce company JD.com, part of the U.S. internet giant’s strategy to expand its presence in Asian markets and take on rivals including Amazon.com.
Google and JD.com described the investment as one piece of a partnership that will include the promotion of JD.com products on Google’s shopping service. This could help JD.com expand beyond its base in China and Southeast Asia and establish a presence in the US and European markets, Reuters reported.
The agreement initially would not involve any major new Google initiatives in China, where the company’s main services are blocked over its refusal to censor search results in line with local laws.
JD.com’s investors include Chinese social media company Tencent Holdings, the rival of Chinese e-commerce leader Alibaba Group, and Walmart.
Google is stepping up its investments across Asia, where a rapidly growing middle class and a lack of infrastructure in retail, finance and other areas have made it a battleground for U.S. and Chinese internet giants.
Google recently took a stake in Indonesian ride-hailing firm Go-Jek.
Google may also invest in Indian e-commerce start-up Flipkart.
Japan’s SoftBank Group, which is making big internet investments, is a major investor in Alibaba.
“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” said Jianwen Liao, JD.com’s chief strategy officer, in a statement.
Company officials said the deal would marry Google’s market reach and strength in analytics with JD.com’s expertise in logistics and inventory management.