Technology

Alibaba Group Holding Ltd Invests In Mei.com, SingPost

Chinese e-commerce giant Alibaba is back in the investment mode after a few weeks of rest. It has invested over $100 million in flash sales online platform Mei.com and $206 million in SingPost. Alibaba announced Wednesday that it would form a team within its Tmall platform to help Mei.com expand its product offerings, customer base, IT and logistics infrastructure.

Alibaba Group Holding Ltd Invests In Mei.com, SingPost

How Mei.com could help Alibaba

Though Alibaba didn’t disclose the size of its investment in Mei.com, sources familiar with the deal told Reuters that it poured more than $100 million. Mei.com sells fashion and luxury goods at discounted rates via flash sales. Its founder Thibault Villent said, “The two parties complement each other.” More than 280 international brands including Zegna, Armani, Roger Vivier, Michael Kors, and Tumi have exclusive partnerships with Mei.com in China.

The strategic investment in Mei.com may be Alibaba’s way to burnish its image with international luxury brands. Many brands have accused the Hangzhou-based company of selling counterfeit goods, which hurts their brand value and revenue. Over the past few months, the Chinese online retail giant has taken a series of steps to curb the sales of fake goods on its platform, and improve its image.

Alibaba hikes stake in SingPost

Separately, Alibaba has invested a total of $205.98 million in SingPost. The Singapore-based company is seeking to bolster its e-commerce business as postal revenue has stagnated. Last year, Alibaba had acquired 10.35% stake in SingPost for $249 million. The Chinese company has now spent another $138.6 million to buy an additional 5% stake. Following the deal, Alibaba will own 14.51% in SingPost.

Alibaba is investing another $67.85 million to acquire a 34% stake in SingPost subsidiary Quantum Solutions International. Quantum offers e-commerce logistics across the Asia Pacific. Following the transaction, QSI will become a joint-venture between Alibaba and SingPost.

Alibaba shares fell 2.03% to $78 at 10:27 AM EDT on Wednesday. The stock was hurt by a broad sell-off of Chinese shares amid fears of economic fallout from a stock bubble in China’s domestic shares.