Hangzhou-based Chinese e-commerce giant Alibaba Group Holdings Ltd. has agreed to invest US$248.9 million for a 10.35% stake in Singapore Post Ltd., according to a joint announcement.
A subsidiary of Alibaba, Alibaba Investment Ltd, will purchase 30 million existing ordinary shares held in treasury by SingPost, as well as 190.096 million new ordinary shares of SingPost to complete the transaction.
The investment is part of a wide-ranging strategic partnerships established between regional logistics leader SingPost, and Alibaba, which is in the process to complete a historic IPO in the U.S.
The two parties have signed a memorandum of understanding to negotiate the establishment of an international e-commerce logistics joint venture over the next few months.
The strategic partnership will allow Alibaba to tap into SingPost’s international logistics capabilities, infrastructure and delivery networks, as well as end-to-end solutions to Alibaba’s customers and merchants. In return, Alibaba will bring logistics volume to SingPost.
The e-commerce market in the Asia-Pacific region is becoming the largest in the world, with e-commerce sales expected to hit more than US$1 trillion by 2020, according to researcher eMarketer.
As the national postal service provider in Singapore for over 150 years, SingPost offers domestic and international postal services, as well as integrated e-commerce logistics solutions covering freight transportation, warehouse fulfillment, delivery and returns as well as web solutions. SingPost’s e-commerce and related businesses currently account for about 26% of its total revenue.
"This strategic investment by Alibaba is…an affirmation of our long-standing strategy in e-commerce logistics as part of SingPost’s growth trajectory," says Lim Ho Kee, chairman of SingPost.
"Through this collaboration, we hope to create concrete benefits for our overseas buyers and sellers by enhancing the user experience and providing greater access to a suite of international e-commerce logistics solutions and products," says Daniel Zhang, chief operating officer of Alibaba Group.