Insights

Google’s Slow Burn Into E-commerce

Google-E-commerce

When thinking about big players in e-commerce, Google is a name that rarely comes up in conversation. With the space dominated by Amazon, Google is typically regarded as a search and technology company, rather than a commerce competitor. While Google Home does rival Amazon Echo in the smart speaker market, shopping seems to be a major differentiator between the two companies’ products. Slowly, however, this may be changing.

Google’s e-commerce history

Google has been making steps in e-commerce since 2002 when the company launched Froogle, a service that offered price comparison for shoppers. The company pivoted in 2012 — their service was renamed Google Shopping, and allowed merchants to have their products and services listed on the site. Google Express, a same-day delivery service, launched in the San Francisco Bay Area in 2013. Most recently, Google has been engaging in relationships and partnerships in an attempt to combat Amazon.

Reacting to Whole Foods

“It was a real wake-up call,” Joe Rosenberg, a former strategic partnerships specialist for Google Shopping, told CNBC of Amazon’s Whole Foods acquisition. According to Rosenberg, the deal had a “ripple effect” in the industry. “Deals we’d been discussing for years were suddenly fast-tracked to retailers’ C-suites.” Walmart, Target, and Costco all entered a Google advertising program following the Whole Foods acquisition, injecting products from each respective retailer into Google Shopping and Google Express. Google, taking a page from the Amazon Marketplace playbook, is now taking a percentage of each purchase rather than a flat advertising rate.

Google is investing in international e-commerce as well. The company announced plans this morning to invest $550 million in JD.com, China’s “leading technology-driven e-commerce company.”. “Google and JD plan to collaborate on a range of strategic initiatives, including joint development of retail solutions in a range of regions around the world, including Southeast Asia, the U.S. and Europe,” the press release reads. “The two companies aim to explore the creation of next generation retail infrastructure solutions, with the goal of offering helpful, personalized and frictionless shopping experiences.” JD.com will be offering products on Google Shopping in multiple regions.