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Google, Rebuilding Its Presence in China, Invests in Retailer JD.com

Google, Rebuilding Its Presence in China, Invests in Retailer JD.com


BEIJING — Google’s best-known products have been blocked by the authorities in mainland China for years. If the American internet giant wants that to change someday, then half a billion dollars’ worth of good will couldn’t hurt.

Google will invest $550 million in the Chinese online retailer JD.com, the two companies said on Monday. In return, JD.com will join the Google Shopping advertising platform, and will work with the Silicon Valley company on other e-commerce projects in Europe, Southeast Asia and the United States.

The companies did not provide details of the projects. According to a JD.com spokesman, the deal will give Google less than 1 percent of the Chinese retailer’s shares, which trade on the Nasdaq.

Google pulled its search engine out of China in 2010, deciding that it would no longer censor its own search results as required by Beijing. But lately, the company has been looking for other ways to serve the planet’s largest population of internet users.

It opened a research center in China dedicated to artificial intelligence and signed an agreement with Tencent, the Chinese internet conglomerate, that will allow the two businesses to work together without fear of patent lawsuits. It made an app version of its translation service available to users in China last year. More recently, it released a Chinese version of an app that helps people manage their files. (Google’s own app store, like its email service, remains inaccessible behind the Great Firewall, as the country’s system of internet controls is known.)

The company never quit China entirely, despite its travails. It has hundreds of employees working on research and product development in the country, which has become a major fount of engineering and scientific talent. Its online advertising business helps Chinese companies reach customers overseas.

Still, mounting a broader return to the Chinese market would not be easy for Google, even if the authorities were to permit it. In the eight years since the company withdrew from China, local rivals have created formidable products in many areas in which it competes, including search, chat, video streaming and cloud computing.

JD.com, meanwhile, is apparently hoping that Google’s global reach will help it sell more products internationally. The company already counts Walmart as a major shareholder. It has extended its reach into Southeast Asia, setting up a local retail business in Indonesia, becoming a partner on an e-commerce venture in Thailand and backing another one in Vietnam.

Across the world, however, JD.com will face tough competition. Alibaba, the Chinese internet behemoth, has poured billions of dollars into its Southeast Asian shopping site, Lazada, and is strengthening its logistics capabilities in that region, Europe and the Middle East.

Follow Raymond Zhong on Twitter: @zhonggg.

A version of this article appears in print on , on Page B2 of the New York edition with the headline: Google Invests in JD.com, a Chinese Retailer. Order Reprints | Today’s Paper | Subscribe





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