Alibaba-backed logistics firm Cainiao invests $290m in Dianwoda

FILE PHOTO: A logo of Cainiao Smart Logistics Network Ltd is seen outside its industrial park in Jinhua, Zhejiang province, China March 29, 2017. Picture taken March 29, 2017. REUTERS/Stringer Reuters

Alibaba-owned logistics affiliate Cainiao Network Technology Co has taken control of domestic logistics service startup Dianwoda by investing $290 million into the firm as part of its move to expand its delivery capacity, according to Chinese media reports.

The deal follows Cainiao and Alibaba’s investment in the $1.38-billion funding round of leading delivery company ZTO Express in May.

The investment into Dianwoda would be Alibaba‘s fourth in a Chinese courier after buying minority stakes in YTO Express Group Co Ltd, Best Inc and ZTO Express.

Cainiao Network Technology offers domestic delivery, logistics and warehousing services for retailers. The company is based in Shenzhen, China.

With Chinese consumers increasingly relying on online purchases and services that can deliver to their doorsteps, e-commerce giants and logistics enterprises have stepped up efforts to expand their express delivery networks.

Last year, Alibaba invested $807 million in its affiliate Cainiao Network raising its stake to a majority 51 per cent, a move that will be coupled with Alibaba’s aggressive bid to invest an additional $15.2 billion over the next five years to expand the e-commerce player’s logistics network.

In May this year, the Chinese e-commerce giant said it led a consortium of investors to buy about 10 per cent of Chinese courier ZTO Express Inc for $1.38 billion, as part of the e-commerce firm’s push into offline services.

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