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Alibaba financial report: Cainiao logistics a boon to revenue

Cainiao, the logistics subsidiary of Chinese e-commerce giant Alibaba, has completed a financing round worth RMB 10 billion (USD 1.5 billion), Alibaba’s 2016 Q4 financial report confirmed on Thursday. Alibaba says it will hold 47% of Cainiao’s stake after this round of financing.

In its financial report, Alibaba said Cainiao is an important part of its ecosystem because it helps improve the efficiency of Alibaba’s logistics. According to the financial report, customers in 13 cities in China including Beijing, Tianjin, Guangzhou, Shanghai and Chengdu can receive their goods bought online on the same day the order is made. Delivery within 48 hours is available in 88 cities.

Apart from providing fast delivery service in cities, Cainiao also tries to improve logistics in rural areas. Cainiao, together with Alibaba’s Taobao, have set up service stations in more than 14,000 villages and 2800 counties.

In less than three years since it was founded in 2013, Cainiao’s service has covered 224 countries and regions in the world. And over 70% of parcels in China are distributed through the company’s network.

There is no doubt that the improved logistics has contributed to Alibaba’s growing revenue and e-commerce business in fiscal 2016.

According to the financial report, Alibaba realized a total revenue of RMB 101 billion in fiscal 2016, which spans from April 1, 2015 to March 31, 2016. And its Q4 revenue was RMB 24 billion, a YoY increase of 39%. Its net profit reached RMB 5.3 billion in Q4, a 85% YoY increase.

Alibaba’s e-commerce business also saw a 41% year-on-year growth in revenue in Q4. “Our core e-commerce business is strong and extremely cash-generative,” Cai Congxin, the VP of Alibaba wrote in an article on Wednesday.

According to China’s National Bureau of Statistics, the scale of the Chinese online retail market in 2015 was RMB 3.8 trillion, a YoY increase of 33.3%. Alibaba accounted for 76.1% of the market scale.

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