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May 29, 2014

Alibaba clinches 10% stake in postal service

As ecommerce explodes across Asia the web giant wants a logistics play

By Ben Sullivan

E-commerce giant Alibaba has bought a 10% stake in Singapore’s postal service for S$312.5 million (£148m) to create an international e-commerce logistics business.

Alibaba is one of China’s biggest e-commerce sites, and the 10.35% stake in SingPost will make it the second largest stakeholder in the postal company after Singapore Telecommunications Ltd.

SingPost’s chairman Lim Ho Kee said in a statement: "We see considerable strategic advantages, such as the creation of new relationships and opportunities for strategic cooperation with the Alibaba Group."

Alibaba has recently been looking to expand its Asia-Pacific region operations, one of the fastest growing e-commerce markets.

It has been reported that e-commerce sales in the region could grow to more than $1 trillion by 2020.

CEO of SingPost Wolfgang Baier said in a joint statement with Alibaba: "E-commerce logistics is the key enabler to capture the growth in e-commerce in Asia."

"With the tremendous e-commerce opportunity, the funds from this investment provide SingPost with financial flexibility and enable us to significantly scale up our e-commerce logistics business and build new capabilities as we are poised for growth in the region."

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Earlier in May, Alibaba’s IPO filing fuelled speculation that it could become the largest flotation in history, with some estimates reaching $245bn.

The Chinese e-commerce firm was founded by entrepreneur Jack Ma in 1999, linking manufacturers from Asia’s largest economy with customers overseas, and has been described as eBay, Paypal and Amazon combined.

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