Alibaba leads consortium of investors to buy ZTO Express worth $1.4bn
Category: #retail  By Dhananjay Punekar  Date: 2018-05-31
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Alibaba leads consortium of investors to buy ZTO Express worth $1.4bn

Alibaba Group Holding Limited reportedly has led the funding round for ZTO Express, a courier company based in China. The e-commerce firm has put in a capital of almost USD 1.38 billion. Analysts predict that the move is aimed at expanding its logistics business in China & abroad for multiplying its customer base.

For the record, ZTO became a public company in 2016 with its stocks simultaneously listed on the New York Stock Exchange. During the same year, it raised funds worth USD 1.4 billion, the largest amount of funding received by any firm in the U.S. during 2016. According to the key officials of ZTO, it is one of China’s biggest logistics organizations and is associated with JD.com as well as Alibaba.

Alibaba is projected to purchase nearly 10% of ZTO’s stocks via an agreement to be finalized next month. Sources cite that the agreement will focus on Alibaba’s new retail version that combines its eCommerce business with offline retail activities. Earlier, Alibaba had launched hybrid stores in China and is now planning to introduce fast logistics over the coming months. Analysts view that the strategic move is aimed at blending the convenience of eCommerce with the benefits provided by brick-and-mortar stores.

It has been anticipated that the investment in the courier firm will strengthen the business ties between Alibaba, ZTO, and Cainiao. Lin Wan, the President of Cainiao, believes that the capital funding will help ZTO & Cainiao to promote innovation & speed up the digitization of the logistics business.

Incidentally, the U.S. pension fund Birmingham Retirement & Relief System filed a litigation against the Chinese courier company in 2016, accusing ZTO of depicting inflated revenue growth margins for attracting investors to fund its business.

The Chinese eCommerce firm is investing in a courier firm for the third time. Previously, Alibaba had poured in some of its overflowing coffers in courier companies such as Best Inc. and YTO express in China. 



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Dhananjay Punekar

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Dhananjay Punekar

Dhananjay Punekar presently develops content for a slew of portals, including Market Size Forecasters and Algosonline. A post graduate in mathematics and business administration, he worked in Infosys BPO Limited prior to switching his professional genre. As a content wr...

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