Alibaba has Alipay, the payment unit of Alibaba, for double play. Another subsidiary for the Alibaba empire is Cainiao which is a logistics company. Just as Alipay makes money by feeding on the ecommerce arm, Cainiao does the same on the logistics element. By keeping these businesses in-house, anyone that looks at the ecommerce business of Alibaba, and cloning it, without knowing that value could be generated outside it could be tripped. For the value that Cainiao is creating for Alibaba, the company is investing another $3.3 billion to bump its stake in the business.
Alibaba is doubling down on its logistics affiliate Cainiao, two years after acquiring a majority stake in the firm. The Chinese giant said today it would invest an additional 23.3 billion yuan (about $3.33 billion) to raise its equity in Cainiao to 63% (from 51%).
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Cainiao was co-founded by Alibaba in 2013 to bring organization in Chinese logistics, particularly around e-commerce deliveries. And it has delivered: Today Cainiao powers a significant volume of Alibaba’s logistics needs in the nation.
The affiliate, which reported $680 million revenue in the quarter that ended in September, matches riders, deliveries and warehouses, underpinning the logistics side of e-commerce platforms Taobao and Tmall in the same way Alipay underpins the payments side, analysts say.
In Africa, do not say you have cloned Alibaba if you have not created Alipay and Cainiao equivalents. Alipay and Cainiao are double plays which help Alibaba stay competitive and profitable.
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“In Africa, do not say you have cloned Alibaba if you have not created Alipay and Cainiao equivalents. Alipay and Cainiao are double plays which help Alibaba stay competitive and profitable”- This your quote sums it up. Thanks for your post.