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Alibaba-led consortium to buy 10% stake in ZTO Express for $1.38bn

LBR Staff Writer Published 30 May 2018

Alibaba-led consortium has agreed to purchase 10% equity stake Chinese express delivery firm, ZTO Express (Cayman), for around $1.38bn.

The investors led by Alibaba and its logistic arm Cainiao Network have entered into a strategic agreement with ZTO Express for the investment and acquisition of interest.

The investment will help Cainiao and ZTO to further develop first and last-mile pickup and delivery capabilities, warehouse management, cross-border logistics and technology-driven smart solutions.

Subject to customary closing conditions, the deal is expected to be completed in early June.

Alibaba Group chairman and Cainiao Network chairman Daniel Zhang said: "ZTO has been an important partner to Alibaba Group and Cainiao Network in the development of the new digital economy.”

Cainiao operates smart logistics network and provides same-day and next-day delivery in around 1,500 districts and counties in China. It also offers e-shipping labels and smart sorting services to the customers in the industry.

The firm also operates Cainiao Post, which is a network of last-mile stations that covers communities in top 100 cities and around 1,800 university campuses across the country.

In addition, Cainiao uses data insights and technology to enhance efficiency across the logistics value chain.

ZTO offers various services across the country, including line-haul, last-mile, express delivery, in-city delivery, fulfilment and warehousing.

The company has also advanced its capabilities in different areas, including LTL transportation services, international logistics and supply-chain management.

ZTO is said to leverage its network partners to offer pickup and last-mile delivery services while controlling the mission-critical line-haul transportation and sorting network within the express delivery service value chain.

ZTO Express founder, chairman and CEO Meisong Lai said: "The growth of e-commerce and New Retail in China demands more efficient express delivery and expanded logistics services.

“To that effect, we are delighted to enhance our partnership with Alibaba and Cainiao through their strategic investments in ZTO.”

Image: Alibaba Group’s corporate campus in Xixi, Hangzhou, China. Photo: courtesy of Alibaba Group Holding Limited.