Alibaba takes majority stake in logistics affiliate, plans to spend big in next 5 years
Alibaba takes majority stake in Alibaba Group Holding on Tuesday announced that as a further step in implementing its “New Retail” strategy, the company had agreed to make an additional investment of 5.3 billion yuan (Bt26.5 billion) to increase its ownership of Cainiao Smart Logistics Network – its logistics affiliate – to a majority stake of 51 per cent.
China-based Alibaba also announced its intention to invest 100 billion yuan over the next five years to further strengthen its global logistics network, with the aiming of realising its mission of fulfilling orders in China within 24 hours – and within 72 hours anywhere else in the world.
These investments are 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, according to the company’s press release.
Upon completion of the transaction, Alibaba’s stake in Cainiao – also based in China – will increase from 47 per cent to 51 per cent, and Alibaba will gain one additional new seat on Cainiao’s board of directors, increasing its board representation to four out of seven seats.
The additional investment of 100 billion yuan over the next five years will be used to increase research and development in logistics-data technology, as well as for development of smart warehousing, smart delivery and global logistics infrastructure, all of which the company sees as core to building the global logistics network of the future.
