- Chinese e-commerce company Alibaba Group Holding announced recently that it is investing 23.3 billion yuan to increase its stake in Cainiao
Recently, Chinese e-commerce company Alibaba Group Holding announced it would be investing 23.3 billion yuan (about $3.3 billion) to increase its stake in its logistics partner Cainiao Smart Logistics Network. This would bring Alibaba’s stake in Cainiao Smart Logistics Network from 51% to 63%, according to Reuters.
Alibaba had co-founded Cainiao in 2013 with department store company Intime Group, multinational company Fosun Group, and several logistics companies. Cainiao is known for matching drivers, deliveries, and warehouses.
Alibaba had originally taken control of Cainiao two years ago and increased its stake 51% from 47%. Then Alibaba said it would spend over 100 billion yuan over five years to build out a global logistics network.
Alibaba pointed out that this investment would go towards subscribing for newly issued Cainiao shares and an equity interest from an existing shareholder. But the company did not provide a break down of the acquisition cost for each deal. Based on the spending, Reuters estimated that Cainiao could be valued at about $28 billion. Cainiao reported $680 million in revenue for the quarter ended in September.
“Logistics is a key pillar of the Alibaba business operating System. It allows us to offer the best service to customers and to effectively advance our new retail strategy,” said Alibaba CEO and chairman Daniel Zhang in a statement to Reuters.
