Singapore Post and Alibaba Group Holding have announced a series of new initiatives for collaboration and growth following the signing of a joint venture agreement. The three initiatives signal the deepening of a business relationship that started last year and a commitment from both parties to increase e-commerce logistics collaboration in the future to build a leading e-commerce logistics platform to service the rapidly growing e-commerce businesses across Asia Pacific and beyond.

Lim Ho Kee, 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.”

Alibaba will invest up to approximately S$92 million (US$67.85 million) in QSI for a 34 per cent stake in Quantium Solutions International (QSI), SingPost will hold the remaining 66 per cent of the equity of QSI. QSI is currently a wholly owned subsidiary of SingPost providing leading end-to-end ecommerce logistics and fulfillment services across the Asia-Pacific region. Its network spans more than 10 countries and the company offers customers e-commerce logistics solutions and warehousing across Asia Pacific.

QSI will reorganise its business and become the joint venture vehicle of SingPost and Alibaba Group. This will allow QSI to ramp up its development of ecommerce logistics infrastructure and services. In addition, QSI will also become a platform for both parties to strengthen their collaboration and realise synergies across their businesses. QSI will encompass e-commerce warehousing, last mile delivery and other end-to-end e-commerce solutions.

Wolfgang Baier, group chief executive officer of SingPost, said: “We are now taking the next step by building a regional e-commerce logistics platform and infrastructure for e-commerce players across Asia-Pacific-based on Quantium Solutions – our e-commerce logistics subsidiary. Alibaba started as our customer and then last year became our shareholder and business partner. Today with the significant growth in e-commerce ahead, both of us are convinced of the long term value of working together in a win-win partnership for e-commerce businesses in Asia-Pacific.”

Alibaba Group will also increase its stake in SingPost from 10.23 per cent to 14.51 per cent for an estimated S$187.1 million (US$138.6 million). SingPost and Alibaba will also share their respective knowledge and leverage each other’s strengths and a joint Steering Committee will be created and drawn from their respective executives.

Daniel Zhang, chief executive officer of Alibaba Group, said: “Over the past year, Alibaba and SingPost have worked closely to explore cross border e-commerce opportunities and created a series of customised 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.”