Alibaba increases stake in Cainiao by $3.3 billion

Alibaba, the world’s largest e-commerce company, has increased its equity stake in Cainiao, a provider of automated logistics systems. The two companies have been partners for some time and last year opened what was reported to be the largest robot-operated warehouse in China. 

The additional investment in Cainiao Smart Logistics Network totals RMB23.3 billion (US$3.3 billion) and increases Alibaba’s equity from approximately 51 per cent to approximately 63 per cent.

The investment method used involved subscribing for newly issued Cainiao ordinary shares in its latest financing round and purchasing certain equity interest from an existing Cainiao shareholder.

Other existing shareholders also participated in the fundraising, with Alibaba says this demonstrates “strong support for Cainiao’s long term outlook”.

Daniel Zhang, Alibaba Group executive chairman and CEO, says: “Logistics is a key pillar of the Alibaba Business Operating System.

“It allows us to offer the best service to customers and to effectively advance our New Retail strategy. Cainiao strives to enhance service and user experience for merchants and consumers through superior technology and digital solutions, both within China and around the world.

“We are committed to supporting its ongoing development, to realizing greater synergies throughout the entire Alibaba Economy and accelerating digitization of the logistics industry.”

The additional investment from Alibaba Group is a vote of confidence in Cainiao. With more financial resources, Cainiao will be able to continue its investment in technologies and logistics infrastructure services to strengthen its smart logistics network and enable innovations in business models, services and technological capabilities for the entire industry.

Cainiao is a global leader in technology-driven logistics and infrastructure. It has introduced internet of things systems and smart supply chain solutions in the sector, along with algorithms and technologies to improve industry efficiency.

It has also developed robust international and cross-border fulfillment solutions to facilitate Alibaba’s international e-commerce business, including Tmall Global, AliExpress and Lazada.

Cainiao has also partnered with Neolix to develop a delivery robot, which can also operate as a mobile shop or vending machine.