Alibaba invests in YTO Express to expand domestic and global reach

[caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Alibaba Group Holding has expanded its stake in YTO Express from 10.5% to 22.5%. According to a joint statement , the two companies will focus on express deliveries, air cargo, building a global logistics and supply chain network, and digital technologies. Alibaba’s additional investment in YTO furthers the technology and e-commerce conglomerate’s global expansion plans and indicates a move away from simply partnering with supply chain providers to embracing supply chain as part of its overall strategic plan. The YTO Express relationship with Alibaba dates back to at least 2013, when YTO was part of a consortium that created what is now Alibaba’s supply chain subsidiary, Cainiao Network Technology. Originally intended to provide the much-needed infrastructure backbone to support faster last-mile deliveries in China, Cainiao and Alibaba have since broadened their strategy beyond China, and aim to deliver anywhere in the world within 72 hours . A 2017 investment in Cainiao led to Alibaba taking majority control of the supply chain provider. Alibaba has also invested in several Chinese Express and Logistics providers, including STO Express , ZTO Express and Yunda Holding in order to advance its global goal. Alibaba initially invested in YTO Express in 2015 to “develop optimal logistics solutions for China in order to raise operational efficiency in the industry” according to its press release . YTO Express initially announced plans to build a global logistics hub at Jiaxing Airport (JXS) in 2018 and finally received approval in June of this year, according to our sister publication, Cargo Facts . According to YTO’s CEO, Yu Weijiao, the hub will serve an important role in China’s “One Belt, One Road” initiative, a global infrastructure development strategy designed to enhance regional connectivity. See also: YTO to double handling capacity at Hangzhou hub, lays plans for future growth [VIDEO] YTO Express also invested in a global logistics hub located at Hong Kong’s International Airport (HKG). Designated as one of Alibaba’s global hubs, other investors in the hub include Cainiao Network and China National Aviation Corporation. YTO Express has continued to grow; in the first half of this year net profits increased 12.5% year on year with 4.94 billion parcels delivered, up almost 30% from last year. In addition, YTO Cargo Airlines, a YTO Express subsidiary, announced it would expand beyond providing cargo capacity solely to YTO Express. As part of this plan, YTO Cargo Airlines in 2018 took a 20% stake in the joint venture with China Northwest Cargo International Airlines to expand its domestic and cross-border capabilities. In the first half of 2020, delivery firms in China delivered 33.9 billion parcels, up 22.1% from the same period last year. In addition, China’s General Administration of Customs noted that the value of imports and exports transacted online by cross-border e-commerce enterprises reached 604.4 billion yuan ($88.4 billion) in the first half of 2020, up by 6.7% YoY. According to Accenture , cross-border e-commerce represents 20% of global ecommerce and is growing at twice the rate of domestic e-commerce, based on 2019 data. China leads the world in cross-border e-commerce and is expected to represent 41% of total cross-border e-commerce market share by 2021.

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