Alibaba ties up with China's state postal service

Agence France-Presse

Posted at Jun 12 2014 05:16 PM | Updated as of Jun 13 2014 05:05 PM

SHANGHAI - E-commerce giant Alibaba said Thursday it would develop a logistics network with China's dominant state postal carrier, the latest in a series of deals before a planned US listing.

The firm operates China's most popular online shopping platform, Taobao, which is estimated to hold more than 90 percent of the online market for consumer-to-consumer transactions. But the company has identified delivery problems as a bottleneck for its business.

It said in a statement that it will develop a "smart" logistics network with China Post through a strategic cooperation deal, integrating more than 100,000 post offices into its own system.

The two will also collaborate on e-commerce, finance and information security, it said, but gave no details.

Taobao sellers have traditionally relied on privately run courier companies to deliver tens of millions of packages daily, rather than the vast yet often inefficient government postal service.

Last year, Alibaba established its own logistics network called Cainiao with partners including Shanghai-based private conglomerate Fosun Group and leading domestic courier companies.

Alibaba said last month it will buy a 10.35 percent stake in Singapore Post -- the city-state's main postal service -- for $249 million and explore a joint venture in the global logistics business.

It has stepped up efforts to expand its business portfolio ahead of a planned US listing that could raise around $15 billion, putting it on a par with Facebook's $16 billion IPO in 2012.

The Chinese company also said Thursday it had reached an agreement with the Italian government to introduce the country's merchants to its flagship business-to-consumer platform Tmall, according to a separate statement. Alibaba has signed a similar agreement with France.

On Wednesday, Alibaba unveiled a US shopping website 11 Main to strengthen its overseas presence, and said it will absorb domestic mobile browser developer UCWeb to expand mobile offerings.

Earlier this week, the company reached agreement with state-backed Shanghai Media Group to develop an entertainment platform and last week said it will pay $192 million for a 50 percent stake in China's top football club, Evergrande.

Analysts say the frenzy of deal making appears aimed at raising the profile of the company ahead of the US listing and convincing future shareholders of its valuation and development prospects.

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