Close

Alibaba Invests $3.3 Billion to Raise Stake in Its Logistics Arm

November 8, 2019 9:54 pm

Beijing (PingWest)—Alibaba Group on Friday invested an additional $3.3 billion in Cainiao Smart Logistics Network, growing its majority stake in its shipping affiliate.

Through the purchase of newly issued Cainiao ordinary shares during a recent financing round with other existing investors and a “certain equity interest” from an existing Cainiao shareholder, Alibaba has increased its stake to 63% from 51%.

In a release, Alibaba Group Executive Chairman and CEO Daniel Zhang emphasized the importance of logistics for the Alibaba Business Operating System, saying it was essential to delivering top-tier customer service and supporting the company’s New Retail strategy to provide a seamless blend of online and offline shopping for consumers.

“Cainiao strives to enhance service and user experience for merchants and consumers through superior technology and digital solutions, both within China and around the world. We are committed to supporting its ongoing development, to realizing greater synergies throughout the entire Alibaba Economy and accelerating digitization of the logistics industry,” Zhang said.

Launched in 2013, Cainiao operated as a digital platform to connect a network of express delivery companies in China, at a time when logistics routes and processes in the country were still largely undeveloped. In 2017, Alibaba upped its stake in Cainiao to 51% from 47%.

Since then, Alibaba has invested heavily in building out the network as well as the technology that powers it, from smart warehouses and robot fulfillment to algorithms that boost efficiencies in shipping. Alibaba has said its “logistics vision” is to fulfill consumer orders within 24 hours in China and within 72 hours anywhere else in the world.

The additional investment was a sign of confidence in Cainiao’s long-term outlook, Alibaba said. With more financial resources, Cainiao could further develop technologies and logistics infrastructure services to strengthen its network as well as the entire industry.