Major Chinese delivery company YTO Express plans to expand its international activities in close cooperation with Alibaba Group after the e-commerce giant invested US$966 million to double its minority stake in the company.
Alibaba has increased its stake in YTO from 10.5% to 22.5% by acquiring a further 12% holding from the company’s founding couple for RMB 6.6 billion, the South China Morning Post reported today. However, Yu Weijiao and his wife remain controlling majority shareholders.
The e-commerce group also has strategic minority stakes in other Chinese courier firms such as ZTO Express, STO Express, Yunda Express and Best Inc. All five delivery firms cooperate closely with Cainiao Network, Alibaba’s logistics subsidiary, to deliver parcels ordered through Alibaba’s Tmall and Taobao online retailing platforms.
Closer cooperation between YTO and Cainiao
YTO said in a press release that it plans to strengthen its existing strategic cooperation with Cainiao in areas such as warehousing, distribution, express logistics, air cargo, international networks, supply chains and digital technology. The courier company especially highlighted its international activities which it has gradually expanded in recent years, closely following China’s ‘One Belt One Road’ initiative.
“Through this cooperation with Alibaba, the two parties will further work together to go overseas, improve the layout of the international express logistics network, promote the construction of global service capabilities for cargo aviation, and deeply participate in the construction of the global logistics supply chain system,” YTO said. The overall aim is “to truly help Chinese businesses and Chinese manufacturing to go global”.
YTO, which went public in 2016, makes solid profits, according to a recent Xinhua report. In the first half of 2020, its net profits rose by 12.5% to RMB 971 million (US$141 million) as it increased turnover by 4.5% to RMB 14.6 billion and expanded parcel volumes by 30% to 4.9 billion.
The company has an extensive network in China, with 133 sorting centres, more than 4,000 branches, 70,000 service points. Its airline unit YTO Aviation operates 12 cargo planes on 20 routes serving cities in China and several Asian destinations.
