Google Inc. and Chinese e-commerce company JD.com Inc. on June 18 announced a strategic partnership, opening the door for the search-engine behemoth to deepen its involvement in online shopping.
The two companies said they plan to collaborate on a range of strategic initiatives, including joint development of retail solutions in Southeast Asia, the U.S. and Europe.
As part of the deal, Alphabet Inc.-owned Google will invest $550 million in cash in JD.com.
JD.com will use its supply chain and logistics expertise, and Google will use its capabilities in technology, to create next-generation retail infrastructure that will offer personalized and seamless shopping experiences, the companies said.
In addition, JD.com plans to make a selection of its products available through Google Shopping.
JD.com Chief Strategy Officer Jianwen Liao was quoted as saying that the agreement represented "a new chapter in our history."
"This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world," Liao said. "This marks an important step in the process of modernizing global retail."
Under the terms of the deal, Google will receive 27,106,948 newly issued class A ordinary shares from JD.com at an issue price of $20.29, equivalent to $40.58 per American depositary share, based on the volume-weighted average trading price over the previous 10 trading days.
The shares represent less than 0.5% of JD.com's more than 1.4 billion shares outstanding, according to data from S&P Capital IQ. The Beijing-based, Nasdaq-listed company has a market capitalization of more than $62 billion.
"We're thrilled to partner with JD.com to explore new opportunities to make online shopping even easier for consumers around the world," Karim Temsamani, president of Google's Asia-Pacific operations, was quoted as saying in a blog on the company's website.