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Best Logistics Seeks Funding for Expansion and Acquisitions

The Wall Street Journal reports that Chinese logistics and technology provider, Best Logistics Technologies Ltd is looking to raise $700 million in new funding. The latest fundraising round is to aid Best Logistics in expansion as well as to pursue acquisitions ahead of an initial public offering (IPO). The timing and venue for Best Logistics’ IPO is unclear, however, as the company has planned for an IPO for at least a couple of years.

Founded in 2007, Alibaba Group Holding Ltd CEO Ma Yun and Foxconn founder and Chairman Terry Guo jointly invested about $15 million in the company and appointed former Google China co-president Zhou Shaoning as chairman. Best Logistics later purchased a 70% stake in Huitong Express, one of the top ten express companies in China according to web publication,

Closely affiliated with Alibaba, Best Logistics receives about 80% of its revenue from Alibaba’s Tmall. Additionally, about 3 million orders are placed via its cloud computing technology-based services through Tmall as well.

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The company offers courier and express delivery services as well as warehousing solutions across China. Thanks to its strategic partnership with property management company, GLP, Best Logistics has at least 2.2 million sq. ft of warehousing in 12 cities across China as of late 2014.

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Its greatest strength, however, appears to be its cloud-based technology capabilities which also ties into its carrier network of over 300 alliances. Among its ‘Best Cloud Warehouse’ solutions includes order and warehouse management systems, mobile logistics tools, route transportation and optimization, returns management and more. Among its ‘Best Cloud Warehouse’ customers include Unilever, 3M, Cofco, E-Land and Septwolves. Additional supply chain customers include Philips, Cisco, Herbalife, Joyoung, Otis, KFC, and Schneider Electric.

Its operating platform, GeniMax system, was developed in-house and is based on a SOA bottom-layer framework design. Modules within the system include its transportation management system, vehicle management system and warehousing management system.

Best Logistics also provides hosting services such as application hosting, tracking, training and other technology support services as well as products such as GPS/GPRS, barcode scanner, RFID, and POS.

The backing of Alibaba is certainly a plus within China for this logistics and technology company but can it replicate its Chinese record elsewhere? Can it achieve success without relying on Alibaba’s Tmall?

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