Alibaba is said to be the world’s largest e-commerce company, mainly concentrating on the business-to-business sector rather than retail, but until now, it has relied on outside companies to provide its logistics.
Now, the company has invested an additional $801 million to buy a controlling stake in Cainiao Smart Logistics.
Cainiao had been Alibaba’s main logistics affiliate and Alibaba had 47 per cent stake in the company.
With the additional investment, Alibaba now owns 51 per cent of Cainiao.
As well as spending the $801 million to raise its stake to 51 per cent, Alibaba is reportedly planning to invest $15 billion over the next five years to “build up its global-logistics infrastructure and development of robots sorting and fulfilling merchandise”, according to WSJ.
Alibaba says the money will be used to increase research and development in logistics data technology, as well as for development of smart warehousing, smart delivery and global logistics infrastructure, all of which are core to building the global logistics network of the future.
Alibaba has also invested $2 billion in southeast Asian e-commerce giant Lazada.
Alibaba says the Cainiao deal will be completed next month.
Daniel Zhang, CEO of Alibaba Group, says: “Our goal with this investment is to provide comprehensive, first-class experience for consumers globally.
“Our commitment to Cainiao and additional investment in logistics demonstrate Alibaba’s commitment to building the most-efficient logistic network in China and around the world.
“By enhancing the logistics capabilities within the Alibaba ecosystem and extending our investment in this sector, we are further enabling our ‘New Retail’ strategy to bring online and offline retail into one seamless experience for shoppers.
“We will also continue to deepen our collaboration with various logistics partners to achieve this goal.”
As to where the $15 billion will go remains to be seen, but Alibaba is already said to be looking at an autonomous logistics platform made by a company called Geek Plus, sometimes written as Geek+.
Geek Plus is a Chinese company, and its logistics robot looks like many other autonomous platforms, such as the Kiva system used by Amazon.
According to a report on ChinaMoneyNetwork.com, Geek Plus secured funding of $14 million in funding earlier this year.
Geek Plus already counts Alibaba as a partner, as well as 10 other companies, including Suning.
Alibaba is currently building a warehouse in Prague, in the Czech Republic, which will utilise the Geek Plus robot, according to CIJEurope.com.