Alibaba acquires stake in Chinese courier ZTO to expand logistics network
- Alibaba and its logistics subsidiary, Cainiao, announced their "strategic initiative" to invest $1.38 billion in ZTO Express and collaborate with the courier, according to a press release.
- The move is part of Alibaba's wider "New Retail" initiative, which seeks the "seamless integration between online and offline commerce."
- According to the press release, successful implementation of New Retail means developing a "smart supply chain" with "advanced logistics," hence Alibaba's investment in one of the largest couriers in the world.
Alibaba's decision to invest in and collaborate with ZTO is right on trend with e-commerce companies moving more of their supply chains in-house. Assuming more control of one's supply chain allows a company to become more nimble and flexible toward consumer demands.
Because e-commerce is such a fast-paced industry, supply chain control is critical to success. One of Alibaba's competitors, Amazon, is already toying with the idea of launching its own shipping service and is testing a "Seller Flex" service that would allow the company direct oversight of the transport of goods from fulfillment center to a customer's front door.
Earlier this year, Chinese e-tailer and competitor JD.com invested $2.5 billion in its logistics subsidiary JD Logistics to ramp up its supply chain and e-commerce presence in China.
Alibaba follows suit to keep up with the competition as the three e-commerce powerhouses seek to become top global, streamlined and supply chain-savvy companies.
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