Alibaba Invests in Haier Logistics Business
Alizila, 12/09/13
Chinese e-commerce conglomerate Alibaba Group has announced that the company will invest a total of USD 364 mln (HKD 2.822 bln) in appliance manufacturer Haier Electronics Group (1169.HK), a subsidiary of Chinese consumer electronics manufacturer Haier Group. Of this figure, USD 240 mln (HKD 1.857 bln) will be invested into Qingdao Haier Logistics (Goodaymart), a Haier Electronics subsidiary comprised of warehouses and distribution networks throughout China that also provides after-sales services to Haier retail franchisees.
Alibaba will purchase a 9.9% stake of Goodaymart at USD 69.8 mln (HKD 541 mln) in subscription shares, and subscribe to convertible bonds of Haier Electronics for USD 169.8 mln (HKD 1.316 bln). These convertible bonds can be converted into the equivalent of a 24.1% stake in Goodaymart in the future.
Alibaba will also acquire a 2 percent stake in Hong Kong-listed Haier Electronics by subscribing to USD 124.5 mln (HKD 965 mln) in newly issued shares of the manufacturer.
The Goodaymart logistics and service network will be available not just to Haier, but to other online appliance vendors. It is expected to provide Alibaba's Tmall.com merchants and consumers with logistics, delivery and assembly services for large goods. Goodaymart currently has nine shipping bases nationwide, 90 logistics delivery centers, and more than 2 mln square meters in warehouse space. The company has logistics and distribution sites in more than 2,800 counties across China and operates more than 17,000 service points.
The Haier-Alibaba partnership represents a continuation of Alibaba's strategy of investing in, rather than owning, distribution infrastructure such as warehouses and delivery vehicles. Alibaba in May announced its plan to invest up to USD 16.3 bln over 5-8 years into a consortium formed by retailers and courier companies to create a nationwide logistics platform.
Editor's Note: For more information on this topic, please see "Haier Terminates Partnership with 360Buy," MD 8/15/12 issue.
Keywords: Goodaymart e-commerce Internet Haier Group 1169.HK logistics investment Alibaba Group
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