Alibaba’s Tsai Chongxin: The withdrawal of Cainiao’s listing application is based on two considerations: the group’s strategy and the IPO progress stage

According to news from this site on March 26, today, Alibaba Group issued an announcement announcing its intention to acquire Cainiao’s minority shareholders’ shares and employee equity for US$3.75 billion, and withdrew Cainiao’s listing application. Alibaba stated that Cainiao will serve as an integral part of Alibaba's core business and an important infrastructure for e-commerce to better strengthen the coordinated development of Alibaba's e-commerce business; Alibaba will continue to increase strategic investment in the logistics field to support Cainiao expands globally.

According to Shell Finance, when talking about whether there was any regulatory influence on the withdrawal of Cainiao’s listing application, Alibaba Group Chairman Tsai Chongxin responded at the evening investor meeting that Supervision did not exert any influence. This is entirely our own decision. The withdrawal of the listing application and the acquisition of equity are based on the group's strategy and the stage of Cainiao's IPO progress.

Tsai Chongxin said that e-commerce is one of Alibaba’s two core businesses. To provide the most competitive consumer experience, the in-depth integration of Cainiao and e-commerce businesses is crucial. "Given the strategic importance of Cainiao to Alibaba and the significant long-term opportunities to build a global logistics network, we believe that now is the right time for Alibaba to increase investment in Cainiao. For Cainiao, there will be opportunities in the future through more sustained Invest in infrastructure, expand the global logistics network, and become a leading network serving global customers." Tsai Chongxin said that this requires long-term investment patience and long-term vision.

Tsai Chongxin said, Considering Cainiao’s strategic role and future plans in Alibaba, as well as the difficulty of the IPO reflecting Cainiao’s strategic value under current market conditions, Alibaba decided to withdraw the application and proposed to acquire a minority of Cainiao Shareholder and employee equity.

Tsai Chongxin also said that from the perspective of Alibaba Group, our primary goal is very clear. To win in the e-commerce field, we need to restore market share and promote business growth. He said that Cainiao provides uniquely valuable logistics services to Alibaba’s domestic and international e-commerce businesses. In the past few months, Cainiao has evaluated its Chinese and international e-commerce businesses and concluded that in order to provide the most competitive consumer experience, it is necessary to achieve deep integration between Cainiao's operations and the group's e-commerce business.

Cainiao Group CEO Wan Lin sent an email to all employees tonight, announcing the upcoming launch of a second entrepreneurial bonus incentive plan, which is really exciting.

This site has noticed that data previously disclosed by Cainiao shows that from fiscal year 2021 to 2023, Cainiao’s total revenue was 52.733 billion yuan, 66.867 billion yuan, and 77.8 billion yuan respectively, with a compound annual growth rate of 21%. In the first quarter of fiscal year 2024, Cainiao’s total revenue was 23.164 billion yuan, a year-on-year increase of 34%. Among them, Alibaba is Cainiao's largest customer, accounting for 29.2%, 30.8%, 28.2% and 29.7% of the total revenue in the above periods respectively.

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