Chinese e-commerce firm Alibaba Group has taken control of logistics unit Cainiao and pledged to spend 100 billion yuan (€12.7 billion) over fiveyears to build out a global logistics network, underscoring aggressive expansion plans overseas.

Alibaba will invest 5.3 billion yuan to boost its stake in Cainiao Smart Logistics Network to 51 per cent from 47 per cent, giving it direct control over the loss-making affiliate, suggesting a rough valuation of Cainiao at around $20 billion.

The announcement comes as Alibaba rapidly expands its e-commerce and logistics network abroad to diversify its consumer base, including newly-announced direct sales channels in countries around Southeast Asia.

Commitment to building the most efficient logistics network

“Our commitment to Cainiao and additional investment in logistics demonstrate Alibaba’s commitment to building the most efficient logistics network in China and around the world,” Alibaba CEO Daniel Zhang said in a statement yesterday.

Cainiao was the focus of an investigation last year by the US Securities and Exchange Commission (SEC) into Alibaba’s accounting practices.

Alibaba, which will gain an extra seat on Cainiao’s board giving it four out of a total seven seats, added that more shares were issued in the funding round to other investors. It did not give details about the other issuances, which would impact Cainiao’s valuation.

The investment also signals Alibaba’s intention to boost control over China’s domestic warehousing and delivery market, which is increasingly competitive as firms seek to make use of troves of logistics data about the country’s internet-savvy shoppers.

The firm, headed by billionaire magnate Jack Ma, said that the longer-term $15 billion investment would be used to develop its data technology and improve its warehousing and delivery.

Alibaba co-founded Cainiao in 2013. It  oversees roughly 57 million deliveries a day.