Chinese tech giant Alibaba has acquired a 2% stake in Shenzhen-listed logistics company Yunda Holdings, continuing its push into the logistics industry.
Why it matters: Alibaba’s investment in Yunda is the latest move for the Chinese tech giant as it tightens its ties with the country’s courier giants. The e-commerce company already holds stakes in top Chinese logistics companies, including ZTO Express, YTO Express, STO Express, and Best.
- Good service and rapid delivery are important components of the online shopping experience in China.
Details: Alibaba now holds 44.5 million shares, or a 2% stake in Yunda through its Hangzhou-based investment arm, according to the courier’s 2019 annual report (in Chinese) filed to the Shenzhen Stock Exchange on Wednesday.
- The e-commerce giant is now Yunda’s eighth-largest shareholder, while Shanghai Luojiesi Investment Management, the entity founded by founder Nie Tengyun, still holds a majority 52.2% share.
- The company did not reveal the investment amount of the deal. Alibaba’s share in Yunda is worth around RMB 1.31 billion ($185 million) calculated at the RMB 65.32 billion market cap as of Wednesday trading.
Context: Revenue from China’s delivery sector jumped 24.2% year on year to RMB 749.78 billion in 2019, according to a report from Chinese research institute Qianzhan Industry Research. The annual growth rate of China’s delivery industry revenue stabilized at around 25% in 2017, significantly slower than the approximately 40% year on year rate of growth that began in 2011, the report showed.
- Shanghai-based Yunda is one of several couriers that work with Alibaba through its logistics arm, Cainiao.
- Chinese courier companies including YTO Express, STO Express, ZTO Express also own stakes in Cainiao. Alibaba invested an additional RMB 23.3 billion in Cainiao in November, boosting its holdings in the logistic unit to approximately 63% from 51%.
- In order to build a global logistics network, Alibaba started to invest in overseas logistics companies, like Singaporean Logistics Company SingPost, early on.