China's largest e-commerce platform, Alibaba does not build its own delivery systems, but it has acquired interests in some express delivery firms through equity investments.
According to STO Express’s announcement, Alibaba gained its 25% shares through an investment of CNY 3.3 billion. Based on other clauses, Alibaba will eventually own 46% of STO Express shares in the future. Apart from STO Express, Alibaba also recently bought YTO Express’s shares for CNY 6.6 billion. It also holds ZTO Express and YUNDA Express’s shares, implying a large -scale plan to occupy space in the express industry.
Under the shock of COVID-19, STO Express’s operating incomes showed a slight decrease of about 6.21% to CNY 9.26 billion in the first half of 2020. Moreover, its gross profit rates also decreased by about 11.69% to 4.29% at the same time. This may be due to higher operating costs. For instance, the firm invested a lot in the navigation subsidy and infrastructure of cloud warehouses.
When facing a drop in performance, technology becomes STO Express’s lifesaver, especially from Alibaba’s capital and technology. As the express firm’s semiannual report said, it regards technological innovation as its main support to improve quality and market shares, promoting it to realize informatization, digitalization and intelligence. Specifically, it will fully utilize its collaboration with Alibaba and Cainiao’s business system to further realize innovation.