What’s new: Alibaba Group Holding Ltd. has agreed to pump 6.6 billion yuan ($967 million) into YTO Express Group Co. Ltd., the Shanghai-listed courier announced in a statement (link in Chinese) on Wednesday.
Two of YTO’s executives — founder Yu Huijiao and his wife — will sell a 12% stake to Alibaba, according to the statement. This will increase Alibaba’s share of YTO to 22.5%, while the couple will remain the company’s controlling shareholders with a combined 42% stake.
The background: YTO — one of China’s largest private couriers — developed into its current form by providing logistics services to e-commerce platforms. Alibaba first invested in the company in 2015 and the latest deal would further cement business ties between the two companies.
However, YTO is not the only courier that Alibaba has chosen to partner with. The dominant e-commerce giant currently holds stake in all three of YTO’s peers — ZTO Express, STO Express and Yunda Express.
YTO ranked third behind ZTO and Yunda in terms of transaction volume for the first six months of this year, according to data from the companies’ first half reports. YTO had a market share of 14.57%, compared to 21.5% and16.6% for ZTO and Yunda, respectively.
Contact reporter Mo Yelin (yelinmo@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)
