Chinese e-commerce giant Alibaba Group Holding has invested an additional 23.3 billion yuan (US$3.3 billion) to increase its stake in Cainiao Smart Logistics Network, as the company gears up for the coming Singles’ Day shopping spree.
Alibaba increased its equity stake in Cainiao from around 51 per cent to around 63 per cent by subscribing to newly issued Cainiao ordinary shares in its latest financing round and purchasing certain equity interests from an existing Cainiao shareholder, according to a company statement on Friday.
“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 Daniel Zhang, Alibaba Group executive chairman and chief executive. “Cainiao strives to enhance service and user experience for merchants and consumers through superior technology and digital solutions, both within China and around the world.”
Founded in May 2013 by Alibaba in partnership with a consortium of companies, Cainiao will use the money raised to invest in technologies and logistics infrastructure services to strengthen its smart logistics network and enable innovations in business models, services and technological capabilities for the entire industry.
As the logistics arm of Alibaba, Cainiao also offers solutions to Alibaba’s international e-commerce business, including Tmall Global, AliExpress and Lazada.
For this year’s Singles’ Day retail extravaganza, Alibaba has set its sights on attracting 500 million customers around the world to shop online on November 11, in a big test of the company’s logistics infrastructure.
New York-listed Alibaba posted better-than-expected revenue of 119 billion yuan (US$16.6 billion) in its fiscal second quarter last week, up from 85.1 billion yuan a year ago. That improvement was made on the back of strong sales at its China retail platforms and growth in annual active consumers, despite a slowdown in the domestic economy and a protracted trade war between the US and China.
Alibaba also plans to raise as much as US$15 billion in a Hong Kong share sale and is now preparing for a listing hearing early next week, according to a report by Bloomberg.
Alibaba owns the South China Morning Post.
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This article Alibaba invests an additional US$3.3 billion in its logistics arm Cainiao, raising stake to 63 pct first appeared on South China Morning Post