Alibaba, through its logistics division Cainiao Network, has extended its agreement and partnership with ZTO Express. A group of investors, led by Alibaba and Cainiao, will invest US$1.38 billion in ZTO in return for approximately a 10% equity stake.
ZTO is an expanded express delivery company in China. The transaction is expected to close in early June, subject to usual regulatory requirements. The investment will further support both Cainiao and ZTO’s focus on building up first and last-mile pickup and delivery capabilities, warehouse management, cross-border logistics and technology-driven smart solutions.
ZTO has been an important partner to Alibaba Group and Cainiao Network in the development of the new digital economy. The continuing expansion of New Retail is catalyzing new opportunities and demands in logistics. This strategic investment will strengthen synergies across our mutual businesses to create new value and improved experience for merchants and consumers.
– Daniel Zhang, CEO of Alibaba Group and Chairman of Cainiao Network
Cainiao offers e-shipping labels, what it calls smart sorting and provides same-day and next-day delivery in nearly 1,500 districts and counties in China. It also operates Cainiao Post, a network of last-mile stations covering communities in top 100 cities and around 1,800 university campuses across the country. ZTO is a leading express delivery company in China that also offers in-city delivery, fulfilment and warehousing.
Alibaba really is firing on all cylinders. Not only has it announced new investments recently in virtual reality technology, but its money division Ant Financial (which is reported to have 622 million users) is also seeking $10bn to help turbocharge expansion.