Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Caixin Global
Caixin Global
Business
Yuan Ruiyang and Manyun Zou

With Alibaba Looming, JD.com’s Courier Arm Moves to Take Over Peer

What’s new: The courier arm of Chinese e-commerce giant JD.com Inc. has moved to take over a smaller peer as the parent looks to buttresses itself against a push by rival Alibaba Group Holding Ltd. into retail.

JD Logistics Inc. announced it will invest 8.98 billion yuan ($1.4 billion) to boost its stake in Deppon Logistics Co. Ltd. (603056.SH) so it owns the heavy cargo specialist nearly outright, according to an exchange filing.

JD Logistics’ planned acquisition of a 66.5% stake will take its holdings in the Shanghai-listed company to 99.99%, according to a filing to the Hong Kong bourse on Sunday.

The Hong Kong-listed courier intends to absorb its peer as a subsidiary, though the plan is to leave Deppon founder Weixing Cui with his seat on the board, the filling said.

JD Logistics said it hopes to take advantage of Deppon’s “well-established” nationwide freight delivery services network and infrastructure to enhance economies of scale, save money and improve customers’ experience, according to the filing.

The deal may not go ahead as it still needs approval from monopoly regulators.

Background: A source close to JD.com told Caixin that this acquisition is part of its strategy to “defend” itself from Alibaba, which is reportedly planning to launch a retail e-commerce platform — a business model that has traditionally set JD.com apart.

Deppon, founded in 1996, primarily offers express delivery services for businesses that need to ship heavy cargos. It is one of a few logistics companies in China that operates all of its own retail locations and transfer centers on its own, rather than through franchise partners.

In the filing, JD Logistics cautioned that the deal is still subject to regulatory approval — including from the Anti-Monopoly Bureau of the State Administration for Market Regulation. The last major deal initiated by JD.com, which was set to acquire Data Group in March 2021, has been waiting for regulators’ approval for almost a year.

Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

Get our weekly free Must-Read newsletter.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.