Chinese e-commerce giant JD.com will buy a controlling stake in courier Kuayue Express at RMB 3 billion (USD 432 million) via its subsidiary JD Logistics, according to a press release from the company on Thursday.
“Collaborating with Kuayue Express advances our integrated supply chain management, technology initiatives and service expansion to third party merchants,” said Zhenhui Wang, CEO of JD Logistics, commenting on the deal, which the company expected to close in the third quarter of this year.
JD Logistics, which was established in 2007 to handle the delivery of goods ordered on JD.com, opened courier service to individuals and external corporate clients in October 2018, competing directly with established players such as SF Express (SHZ: 002352), ZTO Express (NYQ: ZTO), YTO Express (SHH: 600233), Yunda (SHZ: 002021), and Best (NASDAQ: BEST). Its services had been available to individuals in 50 cities in China by August last year, KrASIA reported.
Kuayue is not as well known as the aforementioned companies, which have both consumer-facing and enterprise-facing businesses. The company, with 50,000 employees, 13 chartered cargo planes, and 17,000 trucks, only has corporate clients, handling more than 300,000 orders daily in 500 cities in China.
The B2B firm was among the earliest logistics firms to offer same-day, second-day or third-day delivery right after it was founded in 2007 in Shenzhen.
This acquisition marks a contraction in Kuayue’s valuation, which was worth RMB 20 billion (USD 2.9 billion) according to Hurun Greater China Unicorn Index 2019 Q1. Back then, Kuayue was the fifth most valuable unicorn in the sector, following Alibaba’s Caijiao Networks, JD Logistics, truck-hailing platform Manbang and on-demand grocery delivery service provider Dada JD-Daojia, which was valued at RMB 30 billion (USD 4.3 billion). Dada JD Daojia, which went public earlier this year under the name Dada Nexus (NASDAQ: DADA), had a market capitalization of USD 5.8 billion on Thursday.
Market speculation about sale of Kuayue, which fell under strained cash flow, had been circulating since May, with courier ZTO being a potential buyer.
