Chinese e-commerce giant Alibaba will invest a further SG$279.1 million into Singapore Post (SingPost) to launch three new initiatives for collaboration and growth.
With the newly acquired capital, SingPost and Alibaba aim to increase e-commerce logistics collaboration and build a leading e-commerce logistics platform to service the rapidly growing e-commerce businesses across Asia Pacific and beyond.
Firstly, Alibaba will invest up to approximately SG$92 million in Quantium Solutions International (QSI) for a 34% in the firm. SingPost will hold the remaining 66% of the equity of QSI.
QSI is currently a wholly owned subsidiary of SingPost providing end-to-end ecommerce logistics and fulfillment services across the Asia Pacific region. Its network spans more than 10 countries.
QSI will reorganise its business and become the joint venture vehicle of SingPost and Alibaba. This will allow QSI to ramp up its development of e-commerce logistics infrastructure and services.
Secondly, Alibaba will purchase 107,553,907 new ordinary shares amounting to 5% of the existing share capital of SingPost for SG$187.1 million.
Upon completion, Alibaba’s deemed interest on a fully diluted basis in SingPost will rise from 10.23% to 14.51%. Alibaba’s acquisition of additional equity in SingPost is subject to Info-Communications Development Authority of Singapore (IDA) and SingPost’s shareholder approvals. Alibaba Group acquired its initial stake in SingPost in 2014.
Lastly, SingPost and Alibaba have also entered into a joint strategic business development framework to further improve efficiency and integration of e-commerce logistics solutions. A joint steering committee will be created and drawn from their respective executives.
Lim Ho Kee, chairman of SingPost, said: “The pace of transformation at SingPost has been accelerating steadily. As a postal service provider, we are on a burning platform, facing a global decline in mail revenue with trends like e-substitution and lifestyle changes. “
Wolfgang Baier, group chief executive officer of SingPost, said: “Alibaba started as our customer and then last year became our shareholder and business partner. Today with the significant growth in ecommerce ahead, both of us are convinced of the long term value of working together in a win-win partnership for ecommerce businesses in Asia Pacific.”
Daniel Zhang, chief executive officer of Alibaba Group, said: “This additional investment into SingPost and establishment of a joint venture signifies 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.”