In China’s biggest cities you can get everything from Australian steaks to obscure art delivered within 24 hours due to the country’s highly developed e-commerce logistics infrastructure. The express delivery market has become feverishly competitive, leading companies to seek new funding for major expansions into China’s untapped cities and villages.

Alibaba-backed YTO Express will be merging with the Shanghai-listed clothes company Dalian Dayang Trands Co. Ltd., in a deal worth 17.5 billion yuan ($2.7 billion USD), according to an exchange filing by the clothes company on Tuesday.

Dayang Trands will convert their assets to YTO Express, meaning shareholders of the delivery company will own Dayang Trands through the backdoor listing.

The merger, which is still subject to regulatory approval, saves YTO Express the hassle of applying for an independent listing, which under Chinese regulations can take some time. The urgency of the deal signals their thirst for new capital, as companies vie for any remaining blindspots in China’s logistics market.

E-commerce powerhouses like Alibaba and have been investing strongly in expanding their services to rural areas and supplementing existing services in third and fourth-tier cities.

Several of YTO Express’s competitors have also showed their intention to list, sparking a flurry of similar activity among competitors. In December, Shentong Express (STO) performed a similar backdoor takeover of a listed company on the Shenzhen stock exchange. In February one of the country’s biggest express delivery companies SF Express revealed they were in talks with advisors on an imminent listing. ZTO Express is also expected to pursue a $1 billion USD Hong Kong listing this year.

Meanwhile, Alibaba’s in-house logistics company Cainiao, which counts YTO Express, STO Express, ZTO Express and SF Express among it investors, confirmed their first ever financing round this month at a valuation of about $7.7 billion yuan.

Cate is a tech writer. She worked as a journalist in Australia, Mongolia and Myanmar. You can reach her (in Chinese or English) at: @catecadell or

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