Economy

Alibaba to pay $807 million for majority stake in logistics firm Cainiao

Alibaba to pay $807 million for majority stake in logistics firm Cainiao”

Chinese e-commerce giant Alibaba Group has taken a majority stake in logistics firm Cainiao and will spend more than 100 billion yuan ($15.2 billion, €12.9 billion) on expanding its global network over the next five years, the company announced on Tuesday.

The announcement comes as Alibaba is rapidly expanding its e-commerce and logistics network overseas, including newly announced direct sales channels in Indonesia, Thailand and the Philippines, facilitated by a $2 billion investment in Southeast Asian online retailer Lazada Group.

The firm, headed by billionaire magnate Jack Ma, said that the longer-term $15 billion investment would be used to develop its data technology and improve its warehousing and delivery.

The Hangzhou-based technology giant also announced its intent to invest a further RMB100 billion (US$15.2 billion) over the next five years to strengthen its global logistics network, as it works toward its goal of fulfilling orders in China within 24 hours and within 72 hours in other parts of the world.

The new investment is expected to enhance the overall logistics experience for consumers and merchants across the Alibaba ecosystem, as well as to enable greater efficiencies and lower costs in China's logistics sector, the company said. The e-commerce is also raising the stakes and is increasing their control on the logistics network, increasing their stake from the former 47% to 51% on a 5.3 billion yuan investment. Alibaba denied the claims.

Alibaba said on Tuesday the $15 billion investment will be used to develop its data technology and improve its warehousing and delivery development.

Cainiao was founded in May 2013 by Alibaba in partnership with a consortium of companies including Intime, Fosun, Forchn as well as four Chinese express couriers - STO Express, YTO Express, ZTO Express and Yunda Express. Best Inc, a Chinese delivery firm backed by Alibaba, raised under half of what it had initially meant to in a U.S. IPO last week.

Alibaba did not immediately respond to a request for comment.

Cainiao is not now considering any IPO, the person said.



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