Alibaba Takes Control of Cainiao; Pledges US$15b Investment in Logistics

Chinese e-commerce giant Alibaba Group said it will invest 100 billion yuan (US$15.12 billion) over five years to build a global logistics network and also take control of a US$20 billion unit, underpinning an aggressive overseas expansion, media report.

Alibaba's founder Jack Ma takes control of Cainiao
Alibaba's founder Jack Ma takes control of Cainiao

China's leading e-tailer will be investing 5.3 billion yuan in Cainiao Smart Logistics Network to boost its stake to 51% from 47%. The investment would value Cainiao, a joint venture of top Chinese logistics firms, at around US$20 billion.
Alibaba co-founded Cainiao in 2013, with partners including department store owner Intime Group, conglomerate Fosun Group and a few logistics companies. It oversees roughly 57 million deliveries a day.
"Our commitment to Cainiao and additional investment in logistics demonstrate Alibaba's commitment to building the most-efficient logistic network in China and around the world," Alibaba CEO Daniel Zhang said in a statement this week.

SF Holding accuses Alibaba of hunger for data unrelated to their pact
A Reuters report said Alibaba is rapidly expanding its e-commerce and logistics network abroad, including newly announced direct sales channels in Indonesia, Thailand and the Philippines, facilitated by a US$2 billion investment in Southeast Asian online retailer Lazada Group based in Singapore.
Alibaba's latest investment in Cainiao also signals its intention to boost control over the domestic warehousing and delivery market, which has become increasingly competitive as firms seek to capitalize on logistics data assets.
Last June, China's express company SF Holding Co cut ties with Cainiao, which provides logistics support directly to Alibaba's top e-commerce platform Taobao, claiming Alibaba had requested data unrelated to the existing partnership agreement. Alibaba denied the claims.

Cainiao turns green
In a related development, Cainiao Network has been promoting its “green logistics” master plan, which includes “green warehouses” and other sustainable initiatives.
According to a report published on the Alizila website, Cainiao will employ 20 “green warehouses” across China starting from the Double 11 Single’s Day Global Shopping Festival which takes place in November.
The green warehouses will have recycling stations for card boxes. Under the recycling programme, customers can leave their unwanted shipping boxes at delivery points, and Cainiao will either reuse the boxes or make new ones by recycling.
The master plan also reportedly includes a pledge to plant 100,000 trees in China’s rural northwest to combat desertification.

Nol van Fenema

Write a comment

Comments: 0