Alibaba’s logistics arm gets funding to boost delivery speed

Ecommerce packages at a YTO warehouse in Zhejiang province, China.

Alibaba’s logistics spin-off Cainiao has completed an funding round, the ecommerce firm said today. Reuters reports that the amount is undisclosed. Singapore’s Temasek and GIC, Malaysia’s Khazanah Nasional, and China’s Primavera Capital are the investors.

The subsidiary was founded in 2013 in order to ensure faster deliveries from the merchants on Alibaba’s Taobao and Tmall marketplaces to Chinese consumers. Since Alibaba doesn’t hold its own products, it was losing out in areas like same-day or next-day deliveries to rivals such as JD, Amazon, and Walmart-owned Yihaodian.

This is the first ever investment for Cainiao, which uses big data to accelerate package shipping with 15 delivery firm partners in China. When it was established, Alibaba and some key partners in the Chinese deliveries industry vowed to throw in US$15.4 billion over five to eight years to stretch the system across the country. Cainiao also owns warehouse space.

Alibaba itself has invested in some of its logistics industry buddies, such as YTO Express.

Alibaba has invested in YTO Express. Trucks seen at a YTO depot in Zhejiang province.

Cainiao’s president is Judy Tong. She started at Alibaba as a receptionist in 2000 before moving up to various executive roles. She’s also a senior VP at the ecommerce titan.

“Riding on the back of ecommerce’s rapid development, we believe the future of logistics is promising,” said Judy in a statement emailed to Tech in Asia. “Cainiao is committed to taking logistics services to the next level by working with our partners to enhance efficiency. Cainiao will continue to leverage its strengths in big data and platform management to further improve the efficiency of logistics services for our merchants and customers.”

Converted from Chinese yuan at today’s rate – US$1 = RMB 6.47 – not historical rate in 2013.