Chinese tech giant Alibaba is continuing its push into the logistics industry with plans to scoop up a 14.65% stake in Shenzhen-listed logistics company STO Express.

The company’s controlling shareholder, Shanghai Deyin Investment Holdings Co. Ltd., will set up a joint venture with Alibaba, according to a securities filing dated Monday. Deyin Investment will hold a 51% stake in the new company by investing 29.90% of its STO Express shares. Alibaba will invest RMB 4.66 billion ($693.44 million) for 49% of the joint venture.

Deyin Investment is also setting up a second new subsidiary, which will hold a 16.0% stake in STO Express. The transactions will bring the parent company’s stake in STO Express down to 7.6%. The new subsidiaries haven’t been set up yet.

“This investment is a step forward in our pursuit of the goal of 24-hour delivery anywhere in China and 72 hours globally,” an Alibaba spokeswoman told TechNode.

“Alibaba aims to push logistics costs, which currently comprise about 15% of China’s gross domestic product, down to under 5%, and enhance the efficiency of this sector,” she said. The company will meanwhile “share technological know-how and new logistics solutions to help [our partners] improve services to merchants and consumers.”

This investment would be a continuation of Alibaba’s initiative to tighten its ties with Chinese courier service giants through cross-shareholding. The e-commerce giant already holds minority stakes in three of the country’s top logistics companies: ZTO Express, YTO Express, and Best.

“We will deepen our existing collaboration with Alibaba in logistics technology, last-mile delivery, and new retail logistics,” STO Express said in a statement.

Chinese courier companies including YTO Express, STO Express, ZTO Express, and SF Express also own stakes in logistics company Cainiao, co-founded with Alibaba and more than a dozen other Chinese companies in 2013.

China’s express delivery market has recorded sharp growth over the past few years thanks to a booming e-commerce industry. The country’s delivery sector handled 50 billion parcels in 2018, up 26% year-on-year according to data from the State Post Bureau.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at More by Emma Lee

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