Singapore Post (SingPost) and China’s Alibaba Group on Wednesday announced a series of new initiatives for logistics collaboration to build a leading e-commerce logistics platform to service the rapidly growing e-commerce businesses across Asia-Pacific.
Alibaba will invest up to about SGD92 million (USD67.85m) in Quantium Solutions International (QSI), an e-commerce logistics solutions provider, for a 34 percent stake. SingPost will hold the remaining 66 percent of the equity of QSI. QSI is currently a wholly owned subsidiary of SingPost. Its network spans more than 10 countries and the company offers customers e-commerce logistics solutions and warehousing across Asia-Pacific.
QSI will reorganize its business and become the joint venture vehicle of SingPost and Alibaba Group. This will allow QSI to ramp up its development of e-commerce logistics infrastructure and services. In addition, QSI will also become a platform for both parties to strengthen their collaboration and realize synergies across their businesses. QSI will encompass e-commerce warehousing, last mile delivery and other end-to-end e-commerce solutions.
Alibaba Group will also purchase 5 percent of SingPost’s share for SGD187.1 million (USD138.6m) which will bring its equity stake in SingPost to 14.51 percent from 10.23 percent, subject to regulatory approval. Alibaba Group acquired its initial stake in SingPost in 2014.
The two companies have also entered into a joint strategic business development framework to further improve efficiency and integration of e-commerce logistics solutions. SingPost and Alibaba will share their respective knowledge and leverage each other’s strengths to scale across the e-commerce logistics value chain. A joint Steering Committee will be created and drawn from their respective executives.
"Over the past year, Alibaba and SingPost have worked closely to explore cross border e-commerce opportunities and created a series of customized logistics solutions in various markets. This additional investment into SingPost and establishment of a joint venture signify our commitment in expanding our global logistics footprint, which in turn will help Chinese businesses sell, and global brands deliver more easily around the world," said Daniel Zhang, CEO of Alibaba Group.
"We are now taking the next step by building a regional e-commerce logistics platform and infrastructure for e-commerce players across Asia Pacific based on Quantium Solutions – our e-commerce logistics subsidiary. Alibaba started as our customer and then last year became our shareholder and business partner. Today with the significant growth in e-commerce ahead, both of us are convinced of the long term value of working together in a win-win partnership for e-commerce businesses in Asia Pacific," said Wolfgang Baier, Group Chief Executive Officer of SingPost.