Alibaba Group to invest $15.2bn in Cainiao Smart Logistics Network over five years

By BizClik Admin

E-commerce giant Alibaba Group has announced it plans to invest $15.2bn in Cainiao Smart Logistics Network over the next five years.

This will boost Alibaba’s stake in the company from 47% to 51%, making it the majority shareholder and allowing it to take up four of the seven seats on the board.

Cainiao was co-founded by Alibaba in 2013, along with partners including Fosun Group, Intime Group and various logistics firms. The company oversees around 57mn deliveries every day.

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The company provides logistics support directly to Alibaba’s top e-commerce platform Taobao.

Thanks to the investment, Cainiao will now be valued at $20bn.

Alibaba stated that the investment will be used to develop data technology and improve warehousing and delivery development.

Alibaba is expanding its e-commerce and logistics network abroad, targeting Indonesia, Thailand and the Philippines with direct sales. This will be made possible by a $2bn investment in online retailer Lazada Group which operated across southeast Asia.

Investment in Cainiao also points to Alibaba’s intent to boost control over the domestic warehousing and delivery market.

Alibaba is also targeting Canada as a next centre for expansion, with founder Jack Ma holding a business summit, Gateway 17, in Toronto to gain popularity among firms.

The company has also recently signed an MoU with the Mexican Ministry of Economy to get more Mexican products on its platforms, especially in China.

At present, Cainiao has stated it is not considering an IPO. The deal is expected to be completed in October.

 

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