(Yicai Global) March 11 -- Alibaba Group Holding will invest CNY4.7 billion (USD693 million) for a 14.6 percent indirect stake in domestic courier STO Express, one of its closest logistics partners.
The e-commerce giant will buy into one of two new firms to be set up by Shanghai Deyin Investment Holding, STO Express' controlling shareholder, the Shanghai-based courier announced today. Wholly owned by STO founders Chen Xiaoying and Chen Dejun, Deyin Investment controls almost 54 percent of the logistics company.
The move shows China's dominant e-commerce player is further embedding itself into the country's logistics sector. Last May, Alibaba led a consortium with affiliate Cainiao Network Technology that invested USD1.4 billion for 10 percent of Shanghai's ZTO Express. In 2015, it teamed up with Yunfeng Capital to invest in Shanghai's YTO Express, but did not reveal any investment details.
Under the latest deal, Deyin Investment will split its 46 percent holding in STO Express between firm A (29.9 percent) and firm B (16.1 percent), and retain 7.76 percent itself. Hangzhou-based Alibaba will invest in firm A for a 49 percent stake. Deyin Investment will hold the rest. That will give Alibaba an indirect holding of around 14.6 percent in STO Express.
China's express delivery market has grown rapidly for 10 straight years, exceeding 50 billion parcels last year, making up more than 40 percent of the global total, thanks to the joint efforts of Alibaba, STO Express and other couriers. Set up in 1993, STO Express was one of China's first private express delivery companies.