Google will invest over half a billion dollar cash ($550 million) into JD.com, China’s second largest e-commerce player after Alibaba. Google made the announcement today, calling it a ‘strategic partnership’.
In return, Google will receive shares at an issue priced of $20.29 per share. With a valuation of 62 billion dollars, Google now holds 1% of the company.
The companies claim the investment is part of partnership to develop a better retail infrastructure in various markets.
Even though an amount of $550 million sounds like a giant investment, it’s not Google’s biggest investment by far. The company is known for putting hundreds of millions in companies – you know it and Google’s there. What is interesting, is the timing of the investment. With the US and China clashing in a trade war, the investment by Google in JD feels like a political statement, showing it is possible for companies from both countries to work together. CEO of JD.com called the trade war “horrible” and has already stopped plans of expanding in the US.
Google says the investment in JD.com will not make a difference in Google services being available, as all Google’s services are blocked in China. If it will make a difference on JD being able to make a move on Alibaba is yet to be seen.