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Billionaires clash over Alibaba deliveries

Jun 05. 2017
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CHINA’S wealthiest man, Jack Ma, has locked horns with the country’s fourth-richest in an escalating dispute over the lucrative business of shipping Alibaba’s parcels to millions of shoppers nationwide, according to a Bloomberg report.

Billionaire Wang Wei’s SF Holding Co has accused Alibaba Group Holding Ltd’s delivery affiliate in an exchange filing of removing the company as a shipping option and blocking access to vital data.

The affiliate backed by Ma, known as Cainiao, fired back by saying it was SF that first walled off information it needed to get parcels to customers.

It’s unclear what originally triggered their spat, which threatens a symbiotic relationship that underpinned SF’s listing this year and helped Wang accumulate a fortune of some US$21.5 billion.

Alibaba’s part-owned Cainiao depends on services such as as SF Express – the largest of a handful of domestic delivery businesses – to get parcels to customers’ doorsteps. But their falling out was serious enough that the country’s postal bureau, which also regulates the industry, urged both parties to resolve their differences as soon as possible to avoid throwing the market into disarray.

Their dispute may have arisen over a desire to control the valuable customer information generated through the millions of orders and shipments that flow through Alibaba’s massive e-commerce operation.

SF wouldn’t provide data Cainiao demanded in May because it wasn’t relevant, the delivery firm said in a brief post on messaging service Weibo last Thursday.

“The heart of this conflict revolves around how Cainiao wants access to SF’s data and SF getting more reluctant,” said Marie Sun, a Shenzhen-based analyst at Morningstar Investment Service.

“SF probably wants to maximise its own interest and in the short term it has options to work with other e-commerce platforms.”

Cainiao and SF Express have been close partners in a parcel delivery business underpinning China’s 6.2 trillion yuan ($910 billion) online retail market.

Alibaba’s 450 million active buyers helped spur more than 30 billion express deliveries in China last year, a significant proportion of which were shipped via Shenzhen-listed SF.

Wang’s company said Cainiao accounted for about a fifth of its total deliveries, though it maintained the dispute wouldn’t affect the company’s profit projections for this year and next.

“We are surprised and disappointed by SF’s abrupt action to stop providing the information that is necessary for the smooth completion of parcel deliveries,” Cainiao said in an e-mailed statement.

“To protect more than a million of consumers and merchants from potential parcel losses, we have no option but to remove SF as a delivery option on Cainiao’s network.” 


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