“For e-commerce firms, the three most important infrastructure items are information flow, cash flow and delivery,” Ma said at the time.
South China Morning Post owner Alibaba’s plan to independently list its logistics enterprise “will strengthen Cainiao’s management, improve Alibaba’s financial transparency and capital strength, and bring fierce competition and further standardisation to the entire express delivery industry”, said Bai Wenxi, chief economist at IPG China.
In 2013, Ma envisioned Cainiao delivering a consumer’s online purchase to their doorstep within 24 hours in any of the 2,000 cities on the mainland.
Cainiao launches world’s second-largest IPO as it aims to raise US$1 billion
Cainiao launches world’s second-largest IPO as it aims to raise US$1 billion
Delivery has emerged as a tough new battleground for China’s e-commerce giants, as they jostle to win both local and overseas consumers with faster and cheaper shipping services.
Cainiao ranked No 3 last year in the premium e-commerce logistics segment with a 16 per cent share, according to Chelsey Tam, an analyst at Morningstar.
Ex-Morgan Stanley bankers win coveted role on IPO of Alibaba unit Cainiao
Ex-Morgan Stanley bankers win coveted role on IPO of Alibaba unit Cainiao
Some analyst have expressed concerns about Cainiao’s performance amid the slowdown in e-commerce activities on the mainland.
“Cainiao still relies on orders from Alibaba … while Alibaba is also stuck in a bottleneck,” said Li, without elaborating.
Cainiao’s total sales before inter-segment elimination, which includes revenue from services provided to other Alibaba businesses, rose 16 per cent in the recent financial year to March to 77.5 billion yuan (US$10.6 billion), with 72 per cent of sales generated from external customers.
Upon completion of Cainiao’s IPO, Alibaba will continue to hold more than 50 per cent interest in the company, retaining it as a subsidiary. Alibaba held about 69.54 per cent of Cainiao as of Tuesday.
