In a move to expand its logistics network, Hangzhou-headquartered Alibaba Group Holding plans to buy a stake in Shenzhen-listed courier service firm STO Express. The intended step will give Alibaba a substantial stake in four of the country’s six big logistics companies.
In a statement, Alibaba said it will pay 4.66 billion yuan (€615.6 million / US$693.3 m) for a 49% stake in a new unit that will control 29.9% of Shenzhen-listed STO. “We will deepen our existing
collaboration with STO in technology, last-mile delivery across China and New Retail logistics,” it said, adding that “This investment is a step forward in our pursuit of the goal of
24-hour-delivery anywhere in China and 72 hours globally.”
Two new units
Press reports said that Alibaba signed a framework agreement last week with Deyin Investment, STO’s biggest shareholder, which will devolve a combined 46% stake in the company to two new units that will be soon created. Currently, Deyin controls about 54% of the listed company.
Shanghai-based STO is among a bloc of major parcel delivery companies that have joined Alibaba's logistics division Cainiao.
Alibaba has previously invested in STO's peers like YTO and ZTO.
Cainiao provides software and shares data with warehouses, carriers and other logistics companies that help deliver packages to shoppers on Tmall and Taobao, Alibaba’s largest e-commerce sites.
Worldwide network of logistics hubs
A report in the China Daily quoted Cao Lei, director of China E-Commerce Research Center as saying that "Alibaba's approach is to empower these companies through technology, funds and commercial resources derived from its shopping avenues. The stake-purchase marks one step further toward Alibaba founder Jack Ma's goal of enabling 24-hour delivery nationwide and 72-hour delivery abroad."
Cainiao last year announced that it would build world-class logistics hubs in a number of locations around the world, with the first batch of five cities being Hangzhou, Kuala Lumpur, Dubai, Moscow and Liege.
Nol van Fenema