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Alibaba Leads $1.38 Billion Investment in Courier ZTO

ZTO delivered 1.6 billion parcels in the first quarter, accounting for 16% of the market. Photo: VCG
ZTO delivered 1.6 billion parcels in the first quarter, accounting for 16% of the market. Photo: VCG

Alibaba Group Holding Ltd. is leading a $1.38 billion investment in China’s leading delivery company ZTO Express as the e-commerce giant pushes to expand its logistics capability.

A consortium of investors including Alibaba and its logistics arm Cainiao Smart Logistics Network Ltd. will buy about 10% of ZTO, Alibaba said Tuesday in a statement.

The investment will deepen the collaboration of Cainiao and ZTO in the transformation of China's logistics industry amid the growth of New Retail, a concept developed by Alibaba that promotes seamless integration between online and offline commerce, according to the statement.

NYSE-listed ZTO surged nearly 14% in premarket trading Tuesday. ZTO is one of China’s largest delivery concerns. In the first quarter this year, the company processed 1.6 billion parcels, an increase of 36% from the same period last year. It accounted for 16% of China’s delivery market, according to a company report.

The companies didn’t name the other investors in the deal, which is expected to close in June.

Alibaba previously bought minority stakes in Chinese couriers YTO Express Group Co. and Best Inc. in an effort to expand its logistics network.

The investment will further support Cainiao and ZTO's focus on building up pickup and delivery capabilities, warehouse management, cross-border logistics and technology-driven smart solutions, according to the statement.

Daniel Zhang, CEO of Alibaba Group and Chairman of Cainiao Network, said the deal will strengthen synergies between the companies.

ZTO holds 1% of Cainiao, which it co-founded with Alibaba and more than a dozen other Chinese companies in 2013.

Contact reporter Han Wei (weihan@caixin.com)

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