Date
17 October 2017
Alibaba will gain more control over logistics and customer data following its increased ownership in Cainiao unit. Photo: Bloomberg
Alibaba will gain more control over logistics and customer data following its increased ownership in Cainiao unit. Photo: Bloomberg

Alibaba raises stake in Cainiao logistics affiliate to 51%

Alibaba Group is becoming the majority owner of its logistics affiliate, Cainiao Smart Logistics Network Ltd., by investing an additional US$800 in the company.

The Chinese e-commerce giant is putting in 5.3 billion yuan to raise its stake in Cainiao to 51 percent from 47 percent, the Wall Street Journal reports.

The increased stake will give Alibaba more control over logistics and customer data that offer valuable insight into people’s buying habits.

Apart from this, Alibaba will invest 100 billion yuan  over the next five years to build up its global-logistics infrastructure and development of robots sorting and fulfilling merchandise, according to the report.

Cainiao helps online merchants choose from among 15 delivery firms by providing information on cost and delivery time.

Alibaba was quoted as saying that the additional investment is part of its strategy to create a “seamless experience for shoppers”.

The company said it aims to fulfill orders in China within 24 hours, and within 72 hours anywhere in the world.

Alibaba is profitable but doesn’t count Cainiao losses as part of its own results, which critics have said obscures its financial picture.

In a regulatory filing this year, Alibaba said its net loss from Cainiao was US$153 million in fiscal year 2017, up from US$46 million in the previous year.

The transaction, which is expected to be completed in October, means financial results will be consolidated under Alibaba and reported as part of the business’s core commerce segment, the Journal noted.

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RC

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