Hot in June 2018: Google places a $550 million bet on JD.com

  • On June 29, 2018

Google places a $550 million bet on China’s second-largest e-commerce player.

We have not reached the end of the Amazon-Google battle.

In May 2018 Amazon announced that it is dropping investments in Google search in its quest to become the most powerful advertising outlet.

Now, Google is fighting back by placing a $550 million bet on the Chinese e-commerce giant JD.com.

This investment is part of a strategic partnership with a twofold objective: 

  1. Developing next generation retail infrastructure solutions
  2. Making the shopping experience seamless and more personalized

According to Forbes, a Google and JD.com statement read:

“Google and JD plan to 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. By applying JD’s supply chain and logistics expertise and Google’s technology strengths, the two companies aim to explore the creation of next generation retail infrastructure solutions, with the goal of offering helpful, personalized and frictionless shopping experiences.”

This kind of strategic partnership is a win-win for Google and the retailer partner. According to CNBC: “When retailers partner with Google, it gives their products visibility, and makes it convenient for consumers to purchase them online. For the tech giant, its shopping service is important in helping to win back product searches from Amazon, which is still the 1st platform where product searches start in the US. It is also critical to stay relevant in the voice-powered future of e-commerce.”

 

Where product searches start

Online shopping

Online shopping

 

What does this mean for brands?

With all e-commerce players and digital giants intensifying efforts to step-change the omnichannel shopping experience, brands should consider Retail Digital Media as the heart of the commerce revolution.

Whilst most brands focused efforts on winning at Amazon, retail evolved into a very complex ecosystem.

To stay ahead of the game, it is important to consider that any (e)Retailer can very quickly grow their capabilities through strategic partnerships with other digital or e-commerce giants.

For instance “Target, Walmart, Costco and others already agreed to a new advertising program with Google that makes their products appear in search, instead of paying for an ad, the retailers have to give Google a cut of each purchase.” (Source: CNBC, June 17th, 2018)

This revolution represents a never seen before opportunity for brands to step-change their business.

It all starts by seizing the opportunity to partner with retailers on test and learn plans, as they are increasingly reaching excellence and building best practices. Get ready!

 

Click here to read the full Forbes article

Click here to read the full Bloomberg article

 

Author: Jordane Beller

At the e-business institute, we have been studying the Retailer Digital Media space since 2015.  Get in touch to know more and leverage this opportunity as a competitive advantage for your company.

 

 

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