Buffing up: Alibaba pumps S$312.5m into SingPost

Paper meets the Internet in landmark deal.

The use of traditional mail is rapidly declining, and the country’s oldest courier service has just clinched a new ally in its quest for continued relevance.

Singpost announced Wednesday that the Alibaba Investment Limited will invest S$312.5 million into the service, to purchase 30 million existing ordinary shares held in treasury by SingPost and 190.096 million new ordinary shares and take a 10.35% stake in SingPost upon completion.

The collaboration plays on both companies’ strengths: Singpost is a leader in domestic and international postal services, while Alibaba is the largest online and mobile commerce company in the world in terms of gross merchandise volume in 2013.

The move is aimed at capturing Asia Pacific’s rapidly growing e-commerce market, which currently is the largest in the world.

Both companies also signed a memorandum of understanding which will allow them to discuss and negotiate a joint venture in respect of the business of international e-commerce logistics.