Alibaba strengthens logistics network by investing US$966 million in YTO Express, doubling its stake
- Chinese e-commerce giant Alibaba has increased its stake in YTO Express from 10.5 per cent to 22.5 per cent
- The latest investment in YTO Express, one of China’s largest logistics service providers, comes amid an e-commerce boom driven by the stay-home economy
Hangzhou-based Alibaba has agreed to buy an additional 12 per cent of YTO’s shares from founding couple Yu Huijiao and Zhang Xiaojuan, at a price of 17.406 yuan per share, according to a YTO statement on Wednesday, which added that the founding couple will continue to be controlling shareholders.
The companies will collaborate in four main areas: express deliveries, air cargo, building a global logistics network and supply chain, and digital technologies, the statement said.
“We are pleased to further strengthen the strategic partnership with YTO, focusing on digitisation and globalisation to enhance customer service capabilities,” said a spokeswoman from Alibaba, which is the parent company of the South China Morning Post.
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China’s logistics industry has been developing fast in recent years, driven by the e-commerce boom. In the first half of 2020, delivery firms in China dispatched 33.9 billion parcels, up 22.1 per cent from the same period last year, while revenue from the sector recorded a 12.6 per cent year-on-year growth to 382.4 billion yuan, according to data from the Ministry of Transport.
While it is the operator of the country’s largest online marketplaces Taobao and Tmall, Alibaba does not have a big dispatch fleet of its own in China. To compete with rivals like JD.com, which owns its own network, the company has been ramping up investments in major logistics firms instead.
Founded in 2000, YTO Express is one of China’s major logistics service providers. By the end of 2019, the company had over 400,000 employees operating 133 transfer centres, and over 70,000 service points across the country, data from its website showed.