Google and JD.com
Beijing
Since the news broke that Google would invest $550 million in JD.com in China, there has been a massive amount of news coverage; and for good reason.
It seems that since the announcement, “JD.com is up more than 2.5% Monday morning”[1], and this year, JD.com “is up 5.76%”[2]. Speaking of Beijing, it is interesting to note that the official press release from JD announcing their “strategic partnership”[3] occurred in Beijing on June 18th; the exact place where Google decided to exit China; as previously mentioned, Google has not had a stance in China since 2010, when the company made the decision to step away for the time-being due to the strict Beijing rules of censorship.
Google and JD.com – Update
According to the press release, in return, Google “will receive 27.1 million newly issued JD.com Class A shares at a price of $20.29 per share, equivalent to $40.58 per ADS”[4]. As an update to the previous article, JD has put up a statement on their website that states that they will “collaborate on a range of strategic initiatives, including “joint development of retail solutions in a range of regions around the world, including Southeast Asia, the U.S. and Europe”[5].
Essentially, the press release also states that the two companies are ideally great partners, because JD and Google are not in direct competition with each other. So far, it seems like the partnership is off to a great start. The press release also makes sure to mention a “Safe Harbor Statement”[6], discussing the assumed positive future relationship between the two companies; it seems that these two will be together for a while.
Google and JD.com – Long-Term
In the long-term, this partnership could really help Google to become re-associated with China, without having to censor its content. This would be a huge change. Not only would this help Google.com, but also its other resources, such as Gmail, Google Products (google phone, google glasses, etc.), Google Translate, and YouTube.[7] Google would therefore increase visibility, especially in Asia.
For JD, a company that not many U.S. users know about, would find it an advantage to partner with Google, as JD’s goal is to “expand internationally”[8]; in fact, “At the beginning of 2018, management declared that the company is ready to enter the European market with its new ecommerce platform and delivery services in 2019, starting with France and then expanding to the UK and Germany”[9]. Google is the perfect partner to help attain this goal, and there seems to be no backlash on the China side related to bringing Google back potentially in the future, full-fledged, with no censorship.
Google and JD.com – Conclusion
So far, there have only been small updates related to the new global partnership, but they have been very impactful. The recent rise in JD’s visibility, as well as their percent increase since the announcement. For Sellers, this is great news; another e-commerce platform available to associate their products with, especially in association with the giant that is Google, can streamline the whole Seller-to-consumer process. Keep checking in for more updates.
Adina is a Summer Associate with Rosenbaum Famularo, P.C., the law firm behind AmazonSellersLawyer.com and RosenbaumFamularo.com.
She graduated with a bachelor’s degree in Political Science with a minor in Chinese Language from Trinity College. She will begin law school at New England Law, Boston in August 2018.
[1] http://markets.businessinsider.com/news/stocks/google-jdcom-investment-stock-price-2018-6-1027169198
[2] Ibid.
[3] http://ir.jd.com/phoenix.zhtml?c=253315&p=irol-newsArticle&ID=2354856
[4] http://markets.businessinsider.com/news/stocks/google-jdcom-investment-stock-price-2018-6-1027169198
[5] Ibid.
[6] http://ir.jd.com/phoenix.zhtml?c=253315&p=irol-newsArticle&ID=2354856
[7] https://seekingalpha.com/article/4182667-jd-com-google-perfect-friendship?page=2
[8] Ibid.
[9] Ibid.