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Alibaba Group Invests in Luxury Goods Website Mei, Logistics Firm SingPost

Jul 8, 2015 1:10 PM   By Jeff Miller
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RAPAPORT... Ecommerce giant Alibaba Group invested in luxury goods "flash sales" website Mei.com to enhance supply chain services by integrating  its  business-to-consumer (B2C) platform, Tmall.com,  into Mei.com. The group stated that the investment will expand  the user and brand base and improve logistic  and IT infrastructure services for both properties. Alibaba did not disclose financial details, however, TechCrunch valued the investment at $100 million, citing insiders.

Daniel Zhang, the CEO of Alibaba Group, said, “Alibaba Group’s ecosystem and its multilevel cross-platform retail services will be further enhanced with our investment in Mei.com. We hope that Mei.com will exert its advantages to create synergy with Tmall in providing more premium luxury goods to consumers. At the same time, Alibaba will help Mei.com and other brand partners enter our ecosystem to allow more efficiency in helping them locate consumer groups, conduct brand marketing and establish an online supply chain system.”

Thibault Villet, the founder of Mei.com, explained that Tmall and Mei complement each other to  bring premium and trusted "genuine brands to consumers." Mei.com hosts sales events daily, beginning at 9 a.m., in cooperation with 2,400 top brands, including Tiffany & Co., Armani, Zegna, Michael Kors, Trussardi, Roger Vivier, Longchamp, Tumi and Guerlain.

Alibaba sold its U.S.-based 11 Main (11main.com) luxury goods shopping website to OpenSky about two weeks ago, but continues to operate Taobao Marketplace (www.taobao.com), Tmall.com, Juhuasuan (www.juhuasuan.com),   Alitrip (www.alitrip.com),      AliExpress (www.aliexpress.com),   Alibaba.com (www.alibaba.com),   1688.com (www.1688.com) and Aliyun (www.aliyun.com).

With ecommerce expansion and improved efficiency  in mind  for its online properties,  Alibaba Group also invested in Quantium Solutions (QSI), a subsidiary of SingPost, and signed a joint venture agreement to establish an end-to-end ecommerce logistics platform. QSI's existing network spans 10 countries across the Asia-Pacific region where it offers  ecommerce logistic and warehousing services.  SingPost is the leading provider of mail, logistics and ecommerce solutions in Singapore and the Asia-Pacific region.

Three initiatives were included in the agreement. Alibaba will invest up to $67.85 million in QSI for a 34 percent equity stake, enabling QSI to develop greater  logistics, warehousing, last-mile delivery and other end-to-end ecommerce services. Secondly, Alibaba will purchase up to $138.6 million worth of shares in SingPost. The third initiative enables both firms to share intellectual capital  and leverage  strengths to scale up services across the ecommerce logistics value chain.

Lim Ho Kee, the chairman of SingPost, said, "The pace of transformation at SingPost has been accelerating steadily. As a postal service provider, we are on a burning platform, facing a global decline in mail revenue with trends like e-substitution and lifestyle changes. It is a win-win situation for both of us because we share similar goals and have a natural fit between our operations across Asia. On behalf of my fellow directors, I welcome Alibaba as one of our partners on the next phase of the journey."

Zhang added that during the past year, Alibaba and SingPost have worked closely, while exploring  cross border ecommerce opportunities and creating  a series of customized logistics solutions in various markets. "This additional investment into SingPost and establishment of a joint venture signify our commitment in expanding our global logistics footprint, which in turn will help Chinese businesses sell and global brands deliver more easily around the world."

SingPost's subsidiaries and businesses include SP eCommerce (www.specommerce.com/), Quantium Solutions (www.quantiumsolutions.com/), CouriersPlease (www.couriersplease.com.au/), Famous Holdings (www.famous.com.sg/), Lock+Store (www.lockandstore.com/), DataPost (www.datapost.com.sg/), Speedpost (www.speedpost.com.sg/), vPOST (www.vpost.com.sg/), Omigo Marketplace (www.omigo.com.sg/) and SAM (www.mysam.sg/).

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Tags: alibaba.com, China, ecommerce, internet, Jeff Miller, mei.com, omnichannel, retail
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