CHINA INVESTMENT SINGAPORE

Alibaba to buy 10.35% stake in SingPost with US$249 million investment

How will this help the two companies to reach new heights internationally?

By Elaine Huang

alibaba

In a bid to tap into e-commerce opportunities in Southeast Asia and beyond, Chinese e-commerce firm Alibaba Group Holding Limited (Alibaba Group) has today announced its investment agreement with Singapore Post Limited (SingPost).

The former will invest S$312.5 million (US$249 million) to purchase 30 million existing ordinary shares held in treasury by SingPost and 190.096 million new ordinary shares, as well as a 10.35 per cent stake in the latter, according to an official document.

Having signed a memorandum of understanding, both companies will go forward to talk about a joint venture in terms of international e-commerce logistics. This will give Alibaba Group a quick route to SingPost’s logistics capabilities, infrastructure and delivery networks globally. SingPost will also be able to provide end-to-end solutions to Alibaba Group customers and merchants.

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The Singaporean national postal service provider has earlier launched Omigo, an e-commerce site that will give the publicly-listed company a boost in distribution. According to the same document, 26 per cent of SingPost’s total revenue can be attributed to e-commerce and related businesses.

Daniel Zhang, Chief Operating Officer, Alibaba Group said: “… Through this collaboration, we hope to create concrete benefits for our overseas buyers and sellers by enhancing the user experience and providing greater access to a suite of international e-commerce logistics solutions and products.”

SingPost has invested S$100 million (US$80 million) into improving customer service and productivity. Wolfgang Baier, Group Chief Executive Officer, SingPost added that initiatives include replacing mail sorting machines, delivery fleets and offering 24/7 services like POPStation, which allows consumers to pick up their packages without going to the post office.