Alibaba’s Cainiao creates US$1.24b fund with China Life to finance expansion in ‘smart’ logistics and storage facilities

Logistics offshoot of e-commerce giant teams up with China’s largest insurer to expand and improve parcel delivery across the country

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Deliveries giant Cainiao and China Life have created a $1.24 billion fund to invest in “smart” logistics and parcel handling facilities across China. Photo: Reuters

Published: 5:15pm, 22 Jun 2017Updated: 10:57pm, 22 Jun 2017

Cainiao Network, the logistics arm of e-commerce giant Alibaba Group Holding, has set up an 8.5 billion yuan (US$1.24 billion) fund with China Life Insurance, the mainland's largest insurer, to finance the expansion of its nationwide network of “smart” handling and storage facilities.

Cainiao will operate and manage the assets and facilities. The fund’s creation is designed, the companies said, to help Cainiao maintain its asset-light strategy while gaining additional capital to cope with exploding delivery volumes, which Alibaba executive chairman Jack Ma Yun predicted earlier this year to grow tenfold to 1 billion per day within a decade.

Cainiao is also expected to transfer ownership of some of its existing logistics centres to the fund.

A centre run by Cainiao Network, the delivery arm of Chinese e-commerce giant Alibaba, in Hangzhou. Photo: Imaginechina

The fund will be dedicated to improving Cainiao’s logistics real estate projects and storage facilities and will not be invested into other companies.

Founded by Alibaba together with a consortium of Chinese logistics companies, Cainiao does not employ a single delivery driver, but operates a logistics information platform that links to a network of independent providers, warehouses and distribution centres.