The tech titan – often referred to as the Chinese version of Amazon Inc. (NASDAQ:AMZN), is the largest e-commerce platform in the country.
What Happened: Alibaba pumped in close to $1 billion to purchase a 12% stake in YTO, bringing its total stake to 22.5%, according to SCMP.
The two companies plan to make a collaborated effort in express deliveries, air cargo, setting up a global logistics network and supply chain, and working on digital technologies.
SCMP reported a similar event when Alibaba’s rival JD.com Inc. (NASDAQ:JD) made a $432 million investment in Kuayue Express in mid-August, granting it a controlling stake in the Chinese courier company.
Why It Matters: Reuters reported last week based on unnamed sources that Alibaba was in talks with YTO Express founders to secure an additional 30% stake. At the time, the e-commerce platform held around 10% ownership in the logistics company, which is roughly $0.7 billion.
In 2019, YTO held around 14% market share in China.
Price Action: After a 3.8% uptick during trading hours on Tuesday, Alibaba ADR gained an additional 0.1% in the extended trading hours to close at $298.
Photo courtesy: Thomas Lombard via Wikimedia