On June 18, JD.com Group and Alphabet Inc-CL C announced that Alphabet Inc-CL C will invest US $550 million in cash in JD.com. In return, Alphabet Inc-CL C will receive about 27.11 million newly issued JD.com Class A common shares at a price of US $20.29 per share, equivalent to US $40.58 per ADS (American depositary shares).
In addition to capital cooperation, Alphabet Inc-CL C and JD.com also have a series of strategic projects, one of which is to develop retail solutions in many regions of the world, including Southeast Asia, the United States and Europe. The two sides will explore the next generation of retail infrastructure solutions to provide consumers with a better shopping experience.
In addition, JD.com also plans to select a series of high-quality goods to be sold in many regions around the world through Google Shopping (Alphabet Inc-CL C Shopping).
Carefully combing through past materials, it is not difficult to find that this strategic cooperation between the two sides reflects JD.com 's desire for globalization and new technology. For Alphabet Inc-CL C, it is easing his anxiety about e-commerce. At the same time, it may also be paving the way for its smart speakers.
JD.com 's Global expansion
Judging from a series of layouts this year, JD.com attaches great importance to globalization.
On the eve of the Dragon Boat Festival holiday, Liu Qiangdong said in Bangkok that JD.com expects to bring his e-commerce, logistics and financial business to all ACMECS countries within two years, and under the initiative of "Belt and Road Initiative", to promote the economic digitization of Southeast Asian countries and improve the income level and quality of life of people all over the world.
Mr Liu said JD.com planned to introduce some Chinese home appliance brands to the local market, reducing the price of the Thai home appliance market by 30 per cent and 50 per cent.
In April, JD.com launched the Jingdong Spanish website Joybuy.es, which focuses on the Spanish market and reaches out to Latin America, serving the global market of 400m Spanish speakers.
In an interview in February, Liu Qiangdong announced that JD.com plans to enter the European market to challenge Amazon.Com Inc as soon as 2019, with the goal of spreading services across the continent "within a number of years".
One after another, we can see that JD.com is expanding around the world, and one part of this cooperation is that JD.com and Alphabet Inc-CL C will develop retail solutions in Southeast Asia, the United States, and Europe. Many of JD.com 's products will also be sold worldwide through "Alphabet Inc-CL C Shopping."
In addition, JD.com is making every effort to lay out unbounded retail, and in this ecosystem, unmanned stores, unmanned shelves and intelligent logistics are all important components, which requires strong artificial intelligence and other technologies to support. The alliance with Alphabet Inc-CL C may help JD.com better lay out unbounded retail.
Alphabet Inc-CL C relieves anxiety
Alphabet Inc-CL C and Amazon.Com Inc are the two giants of the global Internet, but Alphabet Inc-CL C has been suppressing Amazon.Com Inc in terms of market capitalization for a long time. But this pattern has been gradually subverted this year.
Amazon.Com Inc's share price has risen by about 75 per cent in the past year. In March this year, with strong growth, Amazon.Com Inc's market capitalization surpassed Alphabet Inc-CL C's parent company Alphabet.
The surge in Amazon.Com Inc's share price is mainly due to the company's expansion into new markets, including its move into physical retail after buying whole Foods. At present, Amazon.Com Inc has dominated several markets, the first is the e-commerce market, the second is the cloud computing market. The company seems to enter new markets or start new business every day.
Perhaps feeling the pressure brought by Amazon.Com Inc, Alphabet Inc-CL C is also following Amazon.Com Inc's example this year.
In June, Alphabet Inc-CL C announced a joint venture with French retail chain giant Carrefour, becoming the first retailer in France to cooperate with Alphabet Inc-CL C.
Starting from 2019, Carrefour will sell goods through Alphabet Inc-CL C's products and services, including Google Home smart speakers and Google Assistant voice assistants. The cooperation also marks the first time for a French retailer to sell groceries through Alphabet Inc-CL C's service.
In addition, some analysts predict that Amazon.Com Inc will develop retail search and beat Alphabet Inc-CL C in this respect. With the passage of time, consumers will gradually get used to using Amazon.Com Inc as your retail search engine instead of using Alphabet Inc-CL C for search.
It is threatened by Amazon.Com Inc in the field of search, which is absolutely not allowed by Alphabet Inc-CL C, so Alphabet Inc-CL C wants to sell JD.com 's goods through Google shopping in order to increase market share. And do not rule out the possibility that in the future Jingdong and Alphabet Inc-CL C will take a form similar to Carrefour and sell JD.com goods through Alphabet Inc-CL C's smart speakers.
Therefore, the strategic cooperation between Alphabet Inc-CL C and JD.com is a cooperation that makes up for each other's shortcomings. JD.com has the opportunity to go global and upgrade his technological level, while Alphabet Inc-CL C has alleviated the anxiety brought to him by Amazon.Com Inc.