Proving the Business Case for the Internet of Things

Alibaba and SingPost increase collaboration in Asia-Pacific e-commerce market

Steve Rogerson
July 14, 2015
 
Chinese online and mobile commerce company Alibaba Group is paying US$67.8m for a 34 per cent stake in Quantum Solutions, leaving current owner Singapore Post with the remaining equity as the two companies promise closer collaboration in the e-commerce logistics market.
 
Quantum provides end-to-end e-commerce logistics and fulfilment services across the Asia Pacific region. Its network spans more than ten countries and the company offers customers e-commerce logistics and warehousing across Asia Pacific.
 
Quantum will reorganise its business and become the joint venture vehicle of SingPost and Alibaba Group. This will allow it to ramp up its development of e-commerce logistics infrastructure and services. In addition, Quantum will also become a platform for both parties to strengthen their collaboration and realise synergies across their businesses. It will encompass e-commerce warehousing, last kilometre delivery and other end-to-end e-commerce.
 
“We are building a regional e-commerce logistics platform and infrastructure for e-commerce players across Asia Pacific based on Quantum Solutions – our e-commerce logistics subsidiary,” said Wolfgang Baier, group chief executive officer of SingPost. “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 businesses in Asia Pacific.”
 
SingPost and Alibaba have also entered a joint strategic business development framework to improve efficiency and integration of e-commerce logistics. They will share their respective knowledge and leverage each other’s strengths to scale across the e-commerce logistics value chain. A joint steering committee will be created and drawn from their respective executives.
 
"The pace of transformation at SingPost has been accelerating steadily,” said Lim Ho Kee, chairman of SingPost. “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.”
 
On top of that, Alibaba Group is buying a further stake in SingPost for US$138.6m. Upon completion, Alibaba’s deemed interest on a fully diluted basis in SingPost will rise from 10.23 per cent to 14.51 per cent. The acquisition 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.
 
“Over the past year, Alibaba and SingPost have worked closely to explore cross border e-commerce opportunities and created a series of customised logistics solutions in various markets,” said Daniel Zhang, chief executive officer of Alibaba Group. “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.”