Alibaba to invest $206M in SingPost and its subsidiary to boost ecommerce logistics

Chinese ecommerce giant Alibaba and Singapore’s national postal and logistics company SingPost have taken their relationship up another notch. Alibaba will invest an additional S$187.1 million (US$138 million) in SingPost, increasing its previous 10.23 percent stake in the company to 14.51 percent.

Not stopping there, Alibaba will also acquire a 34 percent stake in Quantium Solutions International (QSI) by investing up to S$92 million (US$67.9 million). QSI, a wholly owned subsidiary of SingPost, handles end-to-end ecommerce logistics and fulfillment services. The company operates in more than 10 countries across Asia Pacific. The deals bring Alibaba’s total investment in SingPost to close to a billion US dollars.

The third part of the deal will see Alibaba and SingPost enter into a “joint strategic business development framework.” This will allow the two companies to work together and combine knowledge, experience, and strengths. As both companies handle different parts of the ecommerce chain, this collaboration should allow them to better manage and scale their respective businesses.

“The pace of transformation at SingPost has been accelerating steadily,” said Lim Ho Kee, chairman of SingPost, in a statement. “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.”

See: Here’s SingPost’s grand plan to rule ecommerce in Asia

People might not be using the mail to send each other letters anymore, but ecommerce is a booming business that still needs that “last mile” care and attention. SingPost has been particularly active in rolling with the times and making the most out of its position as a vital link in the ecommerce chain.

Last year, it unveiled plans for a 553,000-square-foot, S$182 million (US$134 million) ecommerce logistics hub in Singapore, aiming to ramp up its ecommerce support network in Southeast Asia. This year saw initiatives such as an ecommerce deal with Indonesian telco Trikomsel and a US$3.2 million investment in Australian ecommerce firm Hubbed, through QSI.