july 13, 2015 alibaba announces investment, … word - alibaba invests in singpost flash report by...
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1 Fung Business Intelligence Centre Global Retail & Technology Flash Report: Alibaba Invests SingPost Copyright © 2015 The Fung Group. All rights reserved.
July 13, 2015 Alibaba Announces Investment, Agreements with SingPost
to Expand its Presence in Logistics SUMMARY
In one day, Alibaba announced two investments, totaling at least US$300 million, that enable the company to accomplish two separate but significant goals: to move up the value chain to integrate luxury products and flash sales into its Tmall.com site and to continue its geographic expansion by increasing its investment in SingPost, the leading mail-‐delivery company in Singapore.
Alibaba’s investment in SingPost investment will allow Alibaba to grow its reach through a regional logistics company that has been expanding beyond Singapore into other parts of the Asia-‐Pacific region.
SINGPOST INVESTMENT DETAILS On July 7, Alibaba also announced three initiatives to increase the level of its cooperation with SingPost, including two investments totaling approximately US$206 million:
1. Alibaba will invest US$68 million (S$92
million) in exchange for a 34% stake in Quantium Solutions International (QSI); SingPost will hold the remaining 66% stake. QSI provides end-‐to-‐end logistics and fulfillment services, including warehousing, across 10 countries in the Asia-‐Pacific region. QSI will reorganize to become a joint venture of the two companies and will ramp up its e-‐commerce logistics infrastructure and services, including e-‐commerce warehousing, last-‐mile delivery and solutions for end-‐to-‐end e-‐commerce.
2. To align the two companies’ interests better, Alibaba will purchase an additional 5% stake in SingPost for US$139 million (S$187 million), subject to various approvals. This investment follows an earlier, US$249 million investment for a 10.35% stake in SingPost in May 2014, and will bring Alibaba’s total stake to 15.35%.
3. The two companies entered into a joint strategic business-‐development framework that aims to enhance efficiency and the integration of their e-‐commerce logistics capabilities.
2 Fung Business Intelligence Centre Global Retail & Technology Flash Report: Alibaba Invests SingPost Copyright © 2015 The Fung Group. All rights reserved.
SingPost is the leading provider of mail, logistics and e-‐commerce solutions in Singapore and the Asia-‐Pacific region, with operations in more than 10 countries. The company is in the midst of a transformation in which it has been steadily expanding beyond Singapore through its regional platform, QSI, as well as through subsidiaries and partners.
SingPost offers its customers fully integrated e-‐commerce logistics solutions covering freight, customs and regulations management, warehousing and fulfillment, last-‐mile delivery and returns, in addition to e-‐commerce web services. The company benefits significantly from its affiliation with growing e-‐commerce company Alibaba, as mail revenue has declined globally as consumers have adopted e-‐commerce and digital lifestyles.
SELECTED RECENT ALIBABA INVESTMENTS Alibaba has publicly announced five recent investments in several areas of retailing, media and technology:
Announcement Date
Acquisition
Business Type
Value (USD Mil.)
07/07/2015 Investment in Mei.com Luxury goods 100+
07/07/2015 Investment in SingPost Logistics 206
06/18/2015 Investment with Foxconn in SoftBank’s robotics business
Robotics 120
06/04/2015 Investment in Shanghai Media Group
China Business News 194
09/24/2014 Investment in Beijing Shiji Information Technology
Hotel information technology
Undisclosed
Source: Company reports Alibaba’s major businesses include:
Name Business 1688.com Online wholesale marketplace in China
Alibaba.com China’s largest global online wholesale platform for small businesses
AliExpress Global online marketplace for consumers to buy directly from China
Alitrip Online travel-‐booking platform
Aliyun Provider of cloud-‐computing services
Juhuasuan China’s most popular online group-‐buying marketplace
Taobao Marketplace China’s largest online shopping destination
Tmall.com China’s largest third-‐party platform for brands and retailers
Source: Company reports
3 Fung Business Intelligence Centre Global Retail & Technology Flash Report: Alibaba Invests SingPost Copyright © 2015 The Fung Group. All rights reserved.
Deborah Weinswig, CPA Executive Director—Head of Global Retail & Technology Fung Business Intelligence Centre New York: 917.655.6790 Hong Kong: +852 6119 1779 [email protected]
Cam Bolden [email protected] Sunny Chan, CFA [email protected] Tal Dor [email protected] Marie Driscoll, CFA [email protected] John Harmon, CFA [email protected] Aragorn Ho [email protected] John Mercer [email protected] Swarooprani Muralidhar [email protected] Charlie Poon [email protected] Kiril Popov [email protected] Stephanie Reilly [email protected] Lan Rosengard [email protected] Jing Wang [email protected]