The Cainiao Smart logistics arm of ALIBABA Group Holding’s e-commerce behemoth will be spun off via an initial public offering (IPO) in Hong Kong, according to the company.
Based on a filing on September 26, the Hong Kong exchange approved the business’s capacity to move through with its planned Cainiao split and IPO. According to the filing, Alibaba will continue to own over fifty percent of the unit’s stock, and Cainiao will stay a business subsidiary.
The Cainiao IPO is expected to be amongst the first of Alibaba’s divisions to list on the stock market following the tech giant’s shocking division announced earlier this year.
According to a previous report from Bloomberg News, banks such as Citigroup, Citi Securities, as well as JPMorgan Chase have been collaborating on the first-ever share sale, which has the potential to generate a minimum of one billion dollars.
With the division of the company into six primary divisions and the shift to new management under the recently recruited chief executive officer Eddie Wu, Alibaba is undergoing a historic transformation. To concentrate on Alibaba’s cloud business, his predecessor, Daniel Zhang, resigned as chair and CEO. A few months later, he too gave up both positions to lead a newly created investment fund.
In 2013, Alibaba helped establish Cainiao and used it as the foundation for its Chinese online marketplace’s delivery system.
The division entered the worldwide e-commerce market after Alibaba, managing packages for millions of retailers and brands on websites like AliExpress along with Lazada in Southeast Asia.
As per its website, Cainiao, a term in Chinese for novice or amateur, guarantees package delivery in China within 24 hours and internationally within 72 hours. It collaborates with over three thousand logistics partners to manage over 300 global routes.
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Alibaba unveiled its largest reorganization in its 24-year history at the end of March. It will divide its firm into six parts using a holding corporation management format, the majority of which will look into capital raises or public debuts to finance expansion.
The renovation coincided with Beijing’s attempts to promote the expansion of the private sector after two years of repression and was unveiled the day after Alibaba founder Jack Ma came back after a year overseas.
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