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Alibaba plans to invest US$807m in affiliate Cainiao to gain majority stake

ALIBABA Group Holding Ltd plans to invest CNY5.3 billion (US$807 million) to raise its stake in its logistics affiliate Cainiao Smart Logistics Network Ltdfrom 47 per cent to a controlling share of 51 per cent. The transaction is expected to be finalised in October, subject to regulatory approval.

For the quarter ending June 30, Cainiao's platform enabled the delivery of an average of 55 million packages per day on Alibaba's China E-retail marketplaces, reported American Shipper.

Upon completion of the transaction, Alibaba will gain one additional new seat on Cainiao's board of directors, increasing its board representation to four out of seven seats.

Alibaba also unveiled its goals to pour CNY100 billion into its global logistics network over the next five years. The funds will be used to boost research and development in logistics data technology, and to develop smart warehousing, smart delivery, and global logistics infrastructure.

Alibaba's second quarter net income ballooned by 96 per cent year on year to CNY14 billion on 56 per cent revenue growth to CNY50.2 billion. The company's workforce totals over 57,000 employees.