Alibaba, one of the largest China-based e-commerce companies, has announced that it is investing 312.5 million Singapore dollars (around $249 million) in exchange for a 10.35% stake of Singapore Post Limited (SingPost).
?We are excited to collaborate with SingPost and leverage SingPost?s strong delivery networks and end-to-end e-commerce logistics solutions to facilitate international e-commerce,? stated Daniel Zhang, Chief Operating Officer of Alibaba Group. ?Through this collaboration, we hope to create concrete benefits for our overseas buyers and sellers by enhancing the user experience and providing greater access to a suite of international e-commerce logistics solutions and products.?
This is the first overseas postal agency that Alibaba invested in. However, this is not the first investment in how Alibaba moves physical products. Alibaba is working with China Smart Logistics to enable 24 hour deliveries in China. Alibaba invested in ShopRunner last year.
SingPost is a 150-year-old state postal service for Singapore. The company turned into a profit-generating entity whose logistics and delivery operations extend across South East Asia. The two companies will be working on a joint venture for further international expansion.
Alibaba will take 30 million existing ordinary shares in SingPost along with 190.096 million new ordinary shares. In the first nine months of 2013, Alibaba generated $6.5 billion in revenue. Around $5.7 billion of that amount was in China itself. Only around 9% of that value ($572 million) is attributed to international operations.
?This strategic investment by Alibaba is a significant milestone in our transformation journey into the region and is an affirmation of our long-standing strategy in e-commerce logistics as part of SingPost?s growth trajectory,? stated Lim Ho Kee, Chairman of SingPost. ?SingPost will benefit from Alibaba?s expertise in e-commerce, technology and business volumes. We see considerable strategic advantages, such as the creation of new relationships and opportunities for strategic cooperation with the Alibaba Group, all of which are expected to increase the Company?s growth and development pace as it pursues regional opportunities.?