Alibaba to Spend $15 Billion to Expand Logistics Business

Alibaba Group Holding (NYSE: BABA) plans to spend $15 billion on logistics unit Cainiao to expand plans overseas over a course of 5 years. The company plans to boost their stake in Cainiao Smart Logistics Network from 47% to 51%, totaling a value of around $20 billion. Alibaba is also looking to expand their e-commerce and logistics network abroad to diversity their consumer base including newly announced direct sales channels in countries around Southeast Asia.

Last year, the U.S. Securities and Exchange Commission (SEC) has been investigating in the logistics unit into Alibaba’s accounting practices where the company will gain an extra seat in the unit’s board by issuing more shares into the funding round to other investors.

This investment would be used to develop Alibaba’s data technology and improve the warehousing and delivery. Chinese logistics firms have attracted billions of dollars from equity investors in the past. Cainiao oversees about 57 million deliveries a day.

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