While the announcements from Alibaba were technically made on different days, within a 12-hour period on the evening of July 7 to the morning of July 8, the eCommerce giant released the news about two major investments in the eCommerce industry.
The first was Alibaba’s plans to invest more than $100 million into Mei.com, a flash sales platform for luxury and fashion products. Alibaba’s release didn’t specifically note the price, but a source cited by Reuters said the deal totaled more than that $100 million price tag.
With Alibaba’s investment, Mei.com will be able to upgrade its supply chain services and will also enable Alibaba to use a team from its Tmall B2C platform to help Mei.com gain more users, add more products, as well as enhance logistics and IT infrastructure. Alibaba also noted in a release about the news that Mei.com’s luxury brand connections mesh well with the goods already offered on Tmall.com.
“Alibaba Group’s ecosystem and its multi-level cross-platform retail services will be further enhanced with our investment in Mei.com. We hope that Mei.com will exert its advantages to create synergy with Tmall in providing more premium luxury goods to consumers. At the same time, Alibaba will help Mei.com and other brand partners enter our ecosystem to allow more efficiency in helping them locate consumer groups, conduct brand marketing and establish an online supply chain system,” Daniel Zhang, CEO of Alibaba Group, said in a company news release.
Mei.com’s focus is on its flash sales that launch every day at 9 a.m. Like Tmall.com, Mei.com works with brands across the world to offer more than 2,4000 brands on its site. This includes 280 well-known international brands, including Armani and Michael Kors.
“We are very pleased to receive this strategic investment from Alibaba Group. The two parties complement each other and together with Tmall, we will bring premium and trusted genuine brands to consumers. In the future, we see a significant opportunity to provide enhanced shopping experiences for Chinese customers in search of affordable fashion and luxury products,” said Thibault Villet, founder and CEO of Mei.com.
Alibaba’s Next Big Cross-Border Investment
Alibaba announced today (July 8) that it will invest more than $200 million into Singapore Post and a subsidiary company to help the two companies collaborate on enhancing eCommerce logistics across the Asia Pacific region.
According to terms of the deal, Alibaba will invest $138.6 million in SingPost, bringing its total ownership stake to 14.51 percent. The company will also invest $67.85 million in SingPost Quantium Solutions International, a logistics and fulfillment network.
Alibaba has been a strong promoter of cross-border eCommerce as the eCommerce giant looks to grow its global footprint and strengthen eCommerce relations within China and other regions of the world. And for good reason. Stats cited on Alibaba’s blog indicate that cross-border online shipping will see an estimated CAG of more than 27 percent in the next five years.
“While Alibaba Group currently makes less than 5 percent of its revenue outside of China, Jack Ma, the company’s executive chairman, said his goal is for overseas eCommerce to eventually make up half of company revenue,” a company blog post stated.
To help drive that goal, at least from a logistics standpoint, that’s what sparked an interest from Alibaba to take a larger stake in SingPost.
“[Alibaba] started as our customer and then last year became our shareholder and business partner,” SingPost Group Executive Officer Wolfgang Baier said in a statement. “We are now taking the next step by building a regional eCommerce logistics platform and infrastructure for eCommerce players across Asia Pacific, based on Quantium Solutions.”
By strengthening the relationships between the companies, Alibaba will be able to continue its cross-border investments that it hopes will eventually spur more cross-border commerce.
Alibaba Group Chief Executive Officer Daniel Zhang asserted that Alibaba and and SingPost have in the past year “devised a series of customized logistics solutions in various markets.”
“With these new initiatives, we hope to further drive synergies to help global brands and merchants with convenient access to China and at the same time help Chinese businesses sell and ship easily around the world,” he continued.