Technology

Alibaba Acquires Stake in Singapore Post Office

Alibaba Logo
Source: Courtesy of Alibaba
The Chinese Internet company that is preparing a U.S. initial public offering has acquired a 10.5% stake in Singapore Post Ltd., the main postal service in the city-state, for $249 million U.S. dollars. The acquisition is the latest in a series of purchases Alibaba has made recently with the intent of making it easier for Chinese customers to obtain goods from outside the country.

Alibaba invested $206 million last year in U.S.-based ShopRunner, which will offer Chinese customers direct delivery to China of goods purchased from U.S. websites. The service costs $79 a year for U.S. customers and includes unlimited two-day deliveries from retailers like Neiman Marcus and Lord & Taylor.

Chinese customers have been reluctant to purchase high-end merchandise from in-country websites where the goods are steeply discounted. The merchants are concerned that the low prices will compromise their high-end brand images. When Chinese consumers pay the same price as American consumers, they believe they are getting authentic brands, not inexpensive knock-offs.

The deal announced today with SingPost will result in a joint venture that will provide logistical support for international online sales. Alibaba’s chief operating officer is cited in The Wall Street Journal as saying that SingPost’s “strong delivery networks and end-to-end e-commerce logistics solutions” will help the Chinese Internet retailer “facilitate international e-commerce.”

Alibaba has struck a similar deal with Australia Post to help Australian retailers sell and deliver goods in China. The Chinese firm is angling to expand its Taobao online marketplace into markets with large Chinese populations, such as Hong Kong, Taiwan, Singapore and Australia.

ALSO READ: How Alibaba Measures Up Against Amazon and eBay

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.