Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek

Trending

Filed under: News | Latest Business News

 

Alibaba To Buy $249m Stake In Singapore Post

3 Updates
Alibaba To Buy $249m Stake In Singapore Post
Photo Credit: Getty Images
 
 

YouTube Videos Comments

Full Story

Alibaba To Buy $249m Stake In Singapore Post

A major move to step up its international presence, Alibaba Group announced on Wednesday that it will purchase a 10.35% stake for $249 million in SingPost, Singapore’s national postal service provider.

The deal will render Alibaba the second largest shareholder in the public-traded SingPost, after the government-controlled Singapore Telecommunications which currently owns 25%. One member of Alibaba is expected to join the board of SingPost to oversee the parties’ joint initiative to develop an international e-commerce platform.

“Through this collaboration, we hope to create concrete benefits for our overseas buyers and sellers by enhancing the user experience and providing greater access to a suite of international e-commerce logistics solutions and products.” says Daniel Zhang, Chief Operating Officer of Alibaba in the press release.

Alibaba expects to grow the business of AliExpress and Tmall Global, the international versions of Taobao and Tmall to billions; Southeast Asia will be the fastest growing market, sources close to management said. For the nine months ended Dec 31, 2013, Alibaba recorded $572 million international sales, less than 10% of the total revenue. International retail revenue more than doubled in the same period because of growth in Russia, the U.S. and Brazil, though the total amount was still only $105 million, according to Alibaba’s IPO filing.

The investment is a first by Alibaba in a foreign logistics service provider. It follows Tuesday’s disclosure of an agreement to have Australia Post distribute Alipay shopping cards locally and open an online storefront for Australian products on Tmall Global.

The moves signal the resolve of this e-commerce giant to expand its sprawling ecosystem beyond China’s borders. The market in Southeast Asia is under-developed but fast-growing one. In 2013, e-commerce in Singapore and Malaysia increased by 15% and 25%, respectively, a report by Payvision says. In Indonesia, the growth figure was a stunning 65% for the year, according to e-Marketer. As evidence of the region’s potential, last year Rocket Internet launched Lazada, the Amazon equivalent of Malaysia, following the success of its online fashion retailer Zalora, while Japan’s Rakuten set up a regional headquarters in Singapore.

Besides local customers in the region, the SingPost investment also seeks to capture two underserved groups of Chinese customers: overseas Chinese looking to purchase products on domestic websites, and domestic ones looking to buy foreign products directly from abroad. Currently, the bulk of these transactions are conducted through friends, relatives, and buying agencies (dai gou), often evading tariffs. One estimate by the China e-business Research Center put the total transaction amount of delegated foreign purchases at $12 billion in 2013.

With a long history dating back to 1819, SingPost only began shifting from mail delivery to logistics and e-commerce in 2003. It has expanded aggressively since, now counting 12 warehouses that spread across Southeast Asia, Australia, UK and the U.S. E-commerce related practices account for about 26% of SingPost’s total businesses. A wholly-owned subsidiary Quantium Solutions has more than 200 e-commerce customers, according to the company’s 2013 annual report. Its ground distribution network covers Singapore, India, part of Thailand and the Philippines, and is expected to reach Vietnam and Indonesia this year.

In addition to its distribution network, SingPost has a bonded warehouse at the Airport Transit Center inside Changi Airport in Singapore, and is in the process of building another one in Malaysia – it means that Alibaba will not need to pay taxes for products stored at or passing through those locations.

The partnership is expected to allow Alibaba to lower the cost and have better control over the quality of its international deliveries. Without its own logistics network, the company has experienced delays and uncertainties with custom clearance and on the ground delivery for international sales. In Russia, the high volume of sales through AliExpress once paralyzed a local delivery services provider.

However, securing a trusted mailman is far from guaranteeing global success, especially in the target market of Southeast Asia. The region still faces a slew of challenges in growing e-commerce, such as the low penetration rates of Internet, smartphones and credit cards.

 

iPad Air Giveaway. Win a free iPad Air.

You Might Also Like

Updates


Sponsored Update

Update: 3

Yahoo CEO Marissa Mayer Has Sold $11.6 Million Worth Of Yahoo Shares This Year (YHOO)

Source: Business Insider

Yahoo shareholder Eric Jackson has another attacking blog post on CEO Marissa Mayer today. This time, Jackson argues that Mayer's pay package isn't properly aligned with her performance objectives. He also says she's been selling down her stock, and that sends the wrong message to shareholders and employees.  Jackson did a sum-of-the-parts valuation on Yahoo comparing the company's value when it started with the company's value today. He ...
Source: Business Insider   Full article at: Business Insider 4 days ago, 12:36pm CDT
 


Advertisement


Update: 2

Alibaba uncovers accounting issues in new film division

Source: Channel News Asia

HONG KONG: A film production unit recently purchased by Chinese e-commerce giant Alibaba suspended trading of its stock on Friday (Aug 15) after the discovery of possible accounting inconsistencies.Alibaba Pictures, formerly ChinaVision Media Group, has said the possible irregularities happened before Alibaba's purchase of a 60 per cent stake in the film production firm in June. "The new management has identified certain poss ...
Source: Channel News Asia   Full article at: Channel News Asia 6 days ago, 6:54am CDT
 

More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

Digital Textbooks are the Best Things since PDAs
Digital Textbooks are the Best Things since PDAs
The devices known as digital textbooks are the best things since PDAs (personal digital assistants). They are the supplement to teachers and teaching.
 
 
Bill O'Brien Undecided on Status of Several Key Houston Texans
Bill O'Brien Undecided on Status of Several Key Houston Texans
Houston Texans head coach Bill O'Brien is unsure about the statuses of key players Arian Foster, Andre Johnson, Brian Cushing and Jonathan Joseph for this week's preseason game against the defending AFC champions, the Denver Broncos.
 
 
Apple Soars to Record Amid Optimism About Coming Products
Apple Soars to Record Amid Optimism About Coming Products
Apple Inc. (AAPL)’s stock crossed an all-time high, surpassing a 2012 record as investors look ahead to new products
 
 
Google Glass&#039; new features let you switch chat methods on a whim
Google Glass' new features let you switch chat methods on a whim
If you want to jump from email to Hangouts to deal with a heated conversation, you only have to swipe to make it happen.
 
 
 

About the Geek Mind

The “geek mind” is concerned with more than just the latest iPhone rumors, or which company will win the gaming console wars. I4U is concerned with more than just the latest photo shoot or other celebrity gossip.

The “geek mind” is concerned with life, in all its different forms and facets. The geek mind wants to know about societal and financial issues, both abroad and at home. If a Fortune 500 decides to raise their minimum wage, or any high priority news, the geek mind wants to know. The geek mind wants to know the top teams in the National Football League, or who’s likely to win the NBA Finals this coming year. The geek mind wants to know who the hottest new models are, or whether the newest blockbuster movie is worth seeing. The geek mind wants to know. The geek mind wants—needs—knowledge.

Read more about The Geek Mind.