SingPost and Alibaba to expand e-commerce logistics cooperation
Singapore Post and Alibaba have today (8 July) announced a series of new initiatives for collaboration and growth following the signing of a joint venture agreement. As part of the deal, Alibaba will increase its equity stake in SingPost to 14.51%, subject to regulatory approval.
According to an official statement from Alibaba: “The three initiatives signal the deepening of a business relationship that started last year and a commitment from both parties to increase e-commerce logistics collaboration in the future to build a leading ecommerce logistics platform to service the rapidly growing e-commerce businesses across Asia Pacific and beyond.”
In the first initiative, Alibaba will invest up to around S$92 million (US$67.85 million) for a 34% stake in the SingPost subsidiary, Quantium Solutions International (QSI). SingPost will hold the remaining 66%.
QSI provides end-to-end (E2E) e-commerce logistics and fulfilment services across the Asia Pacific region, with a network of more than 10 countries.
In the second initiative, Alibaba Group will purchase 107,553,907 new ordinary shares amounting to 5% of the existing share capital of SingPost for S$187.1 million (US$138.6 million). This will increase Alibaba’s interest in SingPost from 10.23% to 14.51%. Alibaba Group’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.
In the third leg of the new deal, SingPost and Alibaba have also entered into “a joint strategic business development framework to further improve efficiency and integration of e-commerce logistics solutions”. To help pool their knowledge and leverage each other’s strengths, SingPost and Alibaba will be creating a joint Steering Committee that will be drawn from their respective executives.
Commenting on today’s announcement, 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. It is a win-win situation for both of us because we share similar goals and have a natural fit between our operations across Asia. On behalf of my fellow directors, I welcome Alibaba as one of our partners on the next phase of the journey.”
Daniel Zhang, Chief Executive Officer of Alibaba Group, said, “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.”
Dr. Wolfgang Baier, Group Chief Executive Officer of SingPost, said, “We are now taking the next step by building a regional e-commerce logistics platform and infrastructure for ecommerce 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 business in Asia Pacific.”
