At the beginning of May we reported about Google’s announcement to expand Shopping Express – their same-day delivery service for local stores – to West Los Angeles and Manhattan. Yesterday, Recode reported that Google will invest another $500 million into the nationwide expansion of Shopping Express. Although the sum has not been officially confirmed, Recode quotes Tom Fallows, head of Google Shopping Express, saying:
“You can very much expect that we are putting a lot of money into this and we’re excited and willing to sustain that investment over time as this gets going.”
The expansion can be seen as yet another chapter in the rivalry between Google and Amazon. We recently wrote about the friendship between the two big players turning into a competition regarding Google’s Product Listing Ads. “With each product search that starts on Amazon instead of Google, the search giant’s main business of selling ads alongside search results weakens,” writes Recode. With Shopping Express, Google can get a hold of the $600 billion grocery market and a large piece of the $3.5 billion in so-called direct-response digital ads that consumer package goods companies and electronics brands are expected to spend in the U.S. in 2014. Compared to this prospect, a $500 million investment doesn’t seem too high.