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Alibaba invests in Haier to expand in logistics
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China’s largest e-commerce company Alibaba Group has made a strategic investment in home appliance maker Haier Electronics Group as the Internet giant pushes into the logistics business to extend its services beyond online selling.
Alibaba will invest HK$2.82 billion (US$363 million) in Haier, including HK$1.86 billion to form a new joint venture with Haier’s wholly owned logistics unit Goodaymart, according to Haier’s filing to the Hong Kong stock exchange yesterday. Alibaba will also spend HK$965 million to subscribe to 2 percent of Haier Electronics’ enlarged share capital.
Alibaba will hold 9.9 percent in the joint venture which aims to leverage its e-commerce expertise as well as Haier’s distribution capacity in third- and fourth-tier cities.
Haier’s shares surged 13.3 percent to close at HK$21.10 yesterday.
Alibaba and Haier will combine their e-commerce capacities and after-sale services for home appliances to provide a convenient online shopping experience.
Haier said its Goodaymart unit owns 90 logistics centers and runs distribution sites in more than 2,800 areas in the country. The unit accounts for 93 percent of Haier’s total revenue in the first nine months of this year, according to its earnings release.
Logistics has been the motive behind Alibaba’s recent strategic moves. In May, the e-commerce giant invested an initial 100 billion yuan (US$16 billion) into Cainiao Network Technology Co to create a logistics network to cut the logistic cost for online vendors.
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