Chinese courier STO Express has sold a stake to Alibaba, China’s largest eCommerce player.
According to a report in Reuters, Alibaba is paying $693 million for a 14 percent stake in STO, marking the fourth time Alibaba has made a big investment in a China-based courier company. In a statement, STO said its controlling shareholder is creating a new unit that will own 29.9 percent of the company. Alibaba will invest the $693 million for a 49 percent stake in the new unit and, as a result, will hold more than 14 percent of STO Express.
Alibaba confirmed the deal in a separate statement. “We will deepen our existing collaboration with STO in technology, last-mile delivery across China and New Retail logistics,” the company said. “This investment is a step forward in our pursuit of the goal of 24-hour delivery anywhere in China and 72 hours globally.”
The news follows Alibaba’s investments in YTO Express Group, Best Inc. and ZTO Express (Cayman), noted Reuters. STO is also a partner with Cainiao, Alibaba’s logistics unit. Cainiao makes software and enables data sharing between warehouses, carriers and shippers, enabling packages to easily and quickly reach shoppers who use Alibaba’s Tmall and Taobao platforms.
The Chinese logistics market has become the world’s largest, with total logistics costs reaching $1.76 trillion in 2017 and forecasted to exceed $1.89 trillion the following year. With transportation prices increasing, companies like Alibaba are looking for better ways to get products to customers. Geek+, a Beijing-based logistics company, raised $150 million in November to bankroll the expansion of its robotics technology that aims to improve supply chain and logistics. The company also offers a suite of solutions, including moving technology, automated sorting, an autonomous forklift and a cargo-to-man picking system.