Google Takes $550M Stake In China's JD.com

Shares of JD.Com Inc(ADR) JD were trading higher by more than 5 percent Monday morning after the Chinese e-commerce company announced a new strategic partnership with Alphabet Inc GOOG GOOGL's Google unit.

What Happened

As part of a new strategic partnership, Google will invest $550 million in JD's business and the two companies will collaborate on multiple strategic initiatives, the companies said in a joint press release. For example, the two companies will collaborate and develop "retail solutions" to create "next generation retail infrastructure solutions."

The agreement calls for combining JD's supply chain and logistics expertise with Google's technology strength in Southeast Asia, the U.S. and Europe. The ultimate goal of the collaboration is "offering helpful, personalized and frictionless shopping experiences."

The agreement calls for Google selling a selection of JD's products in multiple regions.

Why It's Important

"This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world," JD.com Chief Strategy Officer Jianwen Liao said in a statement. "This marks an important step in the process of modernizing global retail. As we celebrate our June 18 anniversary sale, this partnership opens a new chapter in our history."

What's Next

The new partnership comes at a time of tension between the U.S. and Chinese governments that could result in a full-blown trade war. Nevertheless, the partnership may give JD a new venue to sell its products to international consumers, CNBC reported.

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Photo courtesy of JD.com.