Alibaba Group is taking a majority stake in an affiliated logistics company and is set to invest another $15.2 billion in expanding its global delivery capabilities.
The Chinese Tmall operator will now have a 51 percent stake in Cainiao Smart Logistics Co. Ltd., a data-driven logistics company founded in 2013 by an Alibaba-led consortium.
Alibaba has made no secret of its goal to offer 24-hour delivery “everywhere” in China and 72-hour delivery around the world through connected logistics, and in a further effort to make that a reality in the next five years, the company said it will be investing 100 billion Chinese yuan, or $15.08 billion, in smart warehousing delivery and global infrastructure.
With a 51 percent stake, Alibaba will gain a fourth seat on Cainiao’s seven-member board. The deal is expected to close next month and Cainiao’s financial results will be combined and reported along with Alibaba’s commerce business segment.
In addition to enhancing the overall logistics experience for Alibaba’s 500 million Tmall consumers and its merchants, the company said the investments and expansions will lower the overall costs in China’s logistics sector.
Daniel Zhang, chief executive officer of Alibaba Group, said the investments also “demonstrate Alibaba’s commitment to building the most efficient logistic network in China and around the world.”
He added that Alibaba will “continue to deepen our collaboration with various logistics partners” to reach its delivery goals.
The logistics investment comes a week after Best Inc., a 10-year-old logistics company that Alibaba holds a 23 percent stake in, went public in the U.S. with an initial public offering cut to $450 million from $750 million.
Alibaba’s founder Jack Ma is a big supporter of globalization and said in June that global buy-and-sell will be a reality in the next decade.
“If you want a coconut from Thailand, in 72 hours you’ll receive it,” he added at the time.
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