Alibaba drops Hong Kong IPO plan for logistics unit Cainiao

  • Alibaba to invest US$ 3.75 billion to buy remaining shares from minority shareholders of Cainiao.
  • Alibaba chairman Joe Tsai said the company had decided to double down on strategically important logistics unit.
  • Alibaba’s five-day-delivery service will be the company’s main business overseas.

Alibaba Group Holding has decided to withdraw the initial public offering (IPO) of its Hong Kong logistics business, Cainiao, and has offered to buy all remaining shares in the unit.

Alibaba’s big change

The Hangzhou-based e-commerce giant said in a filing to the Hong Kong Stock Exchange on Tuesday that it will invest US$3.75 billion to buy the remaining shares from minority shareholders in Cainiao Intelligent Logistics Network, a departure from its previous plan to list in Hong Kong. Alibaba currently holds a 64% stake in Cainiao.

As mentioned in the plan, after the acquisition is completed, Alibaba “plans to restructure parts of Cainiao’s business to better enable cooperation with Taobao, Tmall Group and Alibaba International Digital Commerce Group.”.

Four months ago, Alibaba abandoned plans to divest its cloud business.

In a sweeping restructuring plan announced in 2023, Alibaba said at the time it would seek an IPO for Cainiao, which filed an A1 application with the Hong Kong stock exchange last September.

However, in a statement on Tuesday, Alibaba chairman and co-founder Joe Tsai said Alibaba believes that now is the right time for the company to “increase its investment in Cainiao”.

“Our priority is clear. We want to win in e-commerce by regaining market share and driving growth,” Tsai said.

Also read: JD wins antimonopoly lawsuit against Alibaba, rewards consumers with $140 million

Five-day global delivery service

Alibaba Group Holding expanded its “five-day delivery” service to the US last week, as the Chinese e-commerce giant faces intensified competition against Temu and Shein in the world’s largest economy.

If customers place an order in the US on AliExpress, Alibaba’s e-commerce platform, they can receive the parcel within five days.

The five-day global delivery service was launched last year by Cainiao and AliExpress, coverage has since been expanded to cover Germany, France, Portugal, Saudi Arabia, and Mexico, in addition to the US.

Analysts said this move would provide synergies for Alibaba’s logistics and e-commerce business, where five-day delivery services will be a major part of the company’s business.

Jennifer-Yu

Jennifer Yu

Jennifer Yu is an intern reporter at BTW Media covering artificial intelligence and internet governance. She graduated from The University of Hong Kong with a Master’s degree in Journalism. Send tips to j.yu@btw.media.

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