Tech giant Google said recently it will invest more than half a billion dollars in China’s second-largest e-commerce player, JD.com. As part of a strategic partnership, Google will put $550 million in cash into JD.com, the companies said in a statement. In return, Google will receive more than 27 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share.
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2 giant companies collaborate to better the shopping experience
These two tech companies will work together to develop retail infrastructure that can better personalize the shopping experience and reduce friction in a number of markets, including Southeast Asia.
Partnered with Google, JD will broaden its market further. JD announced it planned to make a selection of items available for sale in places like the U.S. and Europe through Google Shopping — a service that lets users search for products on e-commerce websites and compare prices between different sellers.
Trade War tensions two countries’ relations of trading
It drew more attention by the collaboration between Google and JD during the tension of trading between China and US. A trade war would be “horrible” and it would end up hurting a lot of American brands, claimed by Richard Liu JD.com Founder and CEO.
Why Did Google Invest In JD
As an e-commercial platform, JD cannot reach the same peak as Alibaba, but it keeps strengthening its technology and seeks partnership to against the blast its powerful rival Alibaba.
The e-commerce player has the backing of Tencent, which is involved in business areas including social networks, digital payments and gaming. It also operates China’s largest social messaging platform, WeChat.
JD.com’s partnership with Tencent allows the e-commerce company to sell directly to consumers through the WeChat app. As WeChat is the most popular social media platform in China, JD seems to secure its continous customers.
In addition, JD also pays much attention to keep up its platform technology. JD had been testing out drone delivery services to reach China’s rural consumers while keeping the logistics cost relatively low. The company also tends to make the application of advanced technology, such as virtual reality. JD.com also teamed up with U.S. retail giant Walmart in the grocery business. Walmart opened a small high-tech supermarket in China where consumers can use smartphones to pay for items that are mostly available on its virtual store on online platform JD Daojia, an affiliate of JD.com.
The partnership also helps Google because it gives them a way to compete against Amazon. The recent trend of companies has been to move their advertising dollars away from Google and towards Amazon. The reason for that is because Amazon is in a powerful position by being directly at the point of sale for the customer. And when a customer is already looking to buy, ads have a much larger impact on them.
How to develop your e-commerce business in China
Since the e-commerce tycoon Alibaba is competing with JD or other e-commerce platforms, Chinese domestic or international e-commerce business is booming more than ever. It is easier and more lubricant for your business landing in China. Here are some tips GMA will lead you for your business.
Start your Chinese website and be visible on SEO. It is initially to establish your official website(it is better to work out your Chinese website with your Chinese team or partner) for your business and make it visible on the SEO, especially on Baidu. 75% of the researches in China are on Baidu. You need to have a good ranking on Baidu to be visible. Chinese consumers will only buy brands which have a good ranking on Baidu.
Use social media constantly. It is quite convenient for a business new player to start a business on WeChat as it has created a number of e-commerce options for retailers, including its latest development, Mini Programs. Except Mini Programs, WeChat can be more and more useful. Users can follow the brands’ accounts or tags on WeChat. QR codes are quite handy for promoting the followers or doing the payment.
Make your own way to ecommerce platforms. Tmall or JD is the best famous and popular ecommerce platform with tons of customers. However Tmall or JD is not suitable for every business for its high standard, so for small businesses, it is better to turn to other ecommerce platforms such as Haitao, Vip.com.
Working with KOLs for higher E-reputation. KOL is the efficient way to promote e-commerce, especially for new business in China. To gain in visibility and e-reputation, it is crucial to encourage a positive word-of-mouth. KOL can help you.
The Key Opinion Leaders (KOL) are social media users who succeeded to make a lot of traffic on their accounts and became famous. Chinese consumers idolize KOLs, trust them more than brands. Some KOLs have some millions of fans. They are really good to influence mass population.
Gentlemen Marketing Agency is specialized in the digital marketing in the Chinese market. Do not hesitate to contact us if you want to discuss any projects in China.