ZTO Backs Alibaba's Last-Mile Delivery Network Cainiao Post

Following Alibaba's support of ZTO Express last week, the Chinese courier announced today it paid $168 million for a 15 percent stake in e-commerce giant's last-mile delivery service.

Anna Vodopyanova
    Jun 05, 2018 4:02 PM  PT
ZTO Backs Alibaba's Last-Mile Delivery Network Cainiao Post
author: Anna Vodopyanova   

ZTO Express (Cayman) Inc. (NYSE: ZTO) announced today it purchased a 15 percent stake in Cainiao Post, a last-mile delivery business of Alibaba's logistics firm, Cainiao Smart Logistics Network Ltd.

Just last week, Alibaba Group Holding Ltd. (NYSE: BABA) led a consortium of investors, which included Cainiao, to buy about 10 percent of the Chinese courier ZTO Express as part of the push by the e-commerce giant into offline services.

In 2013, ZTO co-founded Cainiao Network with Alibaba and over a dozen other Chinese companies, and holds 1 percent of the logistics network.

ZTO's investment into Cainiao Post totaled $168 million and was made "to jointly ramp up last-mile service capabilities and provide diversified solutions that enhance efficiency and meet the growing demand from New Retail," the company said in a statement today. New Retail is one of Alibaba's new projects to merge in-shop and online commerce, which involves delivery of products not found at a brick-and-mortar stores to a customer's home.

Cainiao Post includes services such as scheduled deliveries, smart lockers, and delivery outlet pickups.

With today's announcement, ZTO joins other Chinese express delivery companies, including YTO Express, STO Express, Yunda Express, and Best Inc. (NYSE: BSTI), in financing Cainiao Post with an aggregate amount of approximately $495 million.

The chairman, founder, and chief executive officer of ZTO, Meisong Lai, said: "This investment by ZTO in conjunction with other major express delivery companies in Cainiao Post will allow us to offer better services to customers by enhancing resource allocation and strengthening cooperation across our collective last-mile delivery networks."

The stock of ZTO closed at $20.48 per American depositary share on Tuesday, down 14 cents in New York.