China's JD Will Launch Flagship U.S. Store on Google This Year
(Bloomberg) -- JD.com Inc. will launch a flagship online store on Google’s shopping platforms to sell directly to American consumers by the end of the year, hoping to carve out a bigger U.S. footprint even as trade tensions between the U.S. and China grow.
China’s second-largest online retailer is now preparing to set up a storefront on Google’s platforms, the U.S. search giant’s latest effort to get into e-commerce and earn more advertising revenue. The initiative is the first to emerge since Google bought a $550 million stake in JD earlier this year and will eventually roll out globally.
JD relies on China for the vast majority of its revenue but is counting on an international expansion to help offset slowing growth at home. It wants to become a global provider in part because of growing competition from the likes of larger rival Alibaba Group Holding Ltd. and up-and-comer Pinduoduo Inc. But it faces potentially serious headwinds from a roiling trade war between the U.S. and China, which could inflate shipping costs or impose a hefty levy on imported goods.
“When Google Shopping launches, JD will have a flagship store,” JD Logistics’s director of strategy, Bao Yan, told Bloomberg News. Google will handle payment and order processing. “We are shipping from U.S. fulfillment centers to U.S. end-customers.”
Google’s website now offers prime real estate to retailers who pay for promoted listings. Earlier this year, Google began doling out even more perks -- like payment processing -- to select retail partners in a fight against Amazon.com Inc.
The Chinese shopping giant already sells products in the U.S. via its major investor and partner, Walmart Inc. But the partnership with Alphabet Inc.’s Google represents a more direct approach. Unlike Alibaba, JD owns and runs much of its own warehouse and delivery services. It already operates facilities in Los Angeles -- in part to take advantage of the large Chinese diaspora there -- and plans to continuing expanding.
“Our model is that we’re going to operate several fulfillment centers there,” she said. “But we will work closely with partners to build a full network.”
In addition to trade tensions, JD’s push into the U.S. comes after founder and chief executive officer Richard Liu was arrested on rape allegations. He hasn’t been charged with a crime.
©2018 Bloomberg L.P.