The biggest online commerce company in China, Alibaba, recently announced their billion dollar investment in a logistics network. They announced today that they raising the stake of the logistics firm Cainiao Smart Logistics by a whopping 51%. Analysts are also pointing that the massive investment is going to be a step for the Alibaba’s global expansion.

Cainiao Smart Logistics Network has been introduced by the joint effort of Alibaba and 8 other companies in hoped to connect e-commerce companies in China. The e-commerce giant is also reportedly looking to enhance its shipping network to permanently cement its title as the world’s largest e-commerce company in the market.


Alibaba Logistics Plan and Investment

The e-commerce giant has been keen on improving their services and the whole company’s performance this year, one of the latest advancement they are rolling is with the additional investments they are pouring on their global logistics network, the Cainiao Smart Logistics.

Alibaba is reportedly investing a whopping 100 billion yuan or $15.12 billion for the next 5 years of progress and advancement of their logistics network. The e-commerce is also raising the stakes and is increasing their control on the logistics network, increasing their stake from the former 47% to 51% on a 5.3 billion yuan investment. On the Cainiao side, their overall value has tremendously increased at a whopping $20 billion.

Reports have also mentioned that Alibaba’s added acquisition has opened another seat on Cainiao’s board; opening 4 board seats for the e-commerce giant out of the total 7. The deal is also expected to commence and end somewhere around October.


Alibaba’s CEO Zhang’s Note

The company’s CEO Daniel Zhang said in a statement this Tuesday that, "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,"

According to the company’s CEO, they are gearing for world domination as global expansion is exclusively focused on their new investments. Along the lines of their new investments, the e-commerce giant also prepared direct sales channel in neighboring Southeast Asia countries such as Thailand, Indonesia, and the Philippines; accompanied by another $2 billion worth of SEA online retailer investments namely the Lazada Group.

Cainiao’s Side

The logistics company recently burned the bridges with former partner and top logistics firm SF Holdings Co last June; the firm’s recession grants Cainiao’s direct logistics support for Alibaba’s e-commerce platform Taobao. The company also expressed that they are not looking to enter the Initial Public Offering anytime sooner despite billions of dollar investments this past year.

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