Alibaba Investment Limited, a wholly-owned subsidiary of China's e-commerce giant Alibaba Group Holding Limited, will be investing S$312.5 million (US$249 million) for a 10.35 percent stake in Singapore Post Limited (SingPost), Singapore's national postal service provider.
Both companies also signed a memorandum of understanding yesterday (28 May 2014) which allows them to discuss the possibility of a joint venture in the area of international e-commerce logistics.
Through the partnership, Alibaba will be able to leverage SingPost's last mile delivery networks in the Southeast Asia region and end-to-end e-commerce logistics solutions to facilitate international e-commerce. On the other hand, SingPost is expected to benefit from Alibaba's expertise in e-commerce, technology and business volumes. E-commerce logistics seems to be what SingPost needs to transform its business. In an interview with the Singapore daily The Business Times earlier this year, SingPost's Group CEO Dr Wolfgang Baier said as much when he admitted to seeing a declining mail business and was looking at e-commerce as "the lifeline of the future of SingPost."
In a joint SingPost-Alibaba media statement on this S$312.5 million investment, issued yesterday, Dr Baier was quoted saying that the funds from Alibaba's investment will enable SingPost to "significantly scale up its e-commerce logistics business [and] strengthen it as a regional revenue stream."
Sign up for CIO Asia eNewsletters.