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Technology

Alibaba Group to invest $21m in Mengniu-backed milk delivery startup

Alibaba Group plans to invest 150 million yuan ($21 million) in Tianxianpei, a Shanghai-based online-to-offline (O2O) milk delivery platform owned by Chinese dairy products producer Mengniu Dairy, according to the national enterprise information disclosure platform.

The Chinese e-commerce giant has agreed to inject 150 million yuan into the one-year-old milk delivery platform before December 31, 2020 for a 50 per cent stake in the startup, shows the National Enterprise Credit Information Publicity System.

Mengniu Dairy will hold another 50 per cent shares upon the completion of the transaction.

Tianxianpei, founded in July 2018 by the new retail department of Mengniu Dairy, delivers Mengniu-branded fresh milk, fruit juice, coffee and yoghurt products to community residents in China. The startup, which offers services in 15 cities in China, allows customers to directly purchase products by scanning the QR code attached on intelligent refrigerators it placed in communities.

Customers can also order Mengniu-branded dairy products through Alibaba’s Taobao or Tmall online marketplaces, and then use an SMS code or QR code to pick up orders from nearby refrigerators based on a long-term order service.

The investment marks the latest attempt made by Alibaba to develop its O2O new retail business by leveraging digitalized operating systems, in-store technology, supply chain systems, consumer data and the mobile ecosystem to provide a seamless shopping experience for customers.

One of the best demonstrations of its new retail efforts is the launch of its fresh produce retail chain Freshippo, also known as “Hema” in Chinese. The new retail brand offers a mobile app that allows consumers to search for products and place orders while browsing in-store. It uses transaction data to personalize recommendations and geographic data to help plan the most efficient delivery routes.

Freshippo had 150 self-operated stores mainly located in first and second-tier cities as of June 30, 2019.

Alibaba is offering at least 500 million shares for a secondary listing on the Hong Kong stock exchange on November 26. The Hangzhou-based company first went public in New York after raising $25 billion in an initial public offering (IPO).

Alibaba has poured about 38.53 billion yuan ($5.47 billion) into 23 companies as of June 30, 2019, according to its prospectus. About 42.41 per cent, or 16.34 billion yuan ($2.32 billion), was injected into companies in the logistics field, while over 30 per cent, or 11.81 billion yuan ($1.68 million), was put in its core business investments.

Investments in innovative services accounted for about 15.7 per cent, standing at over 6 billion yuan ($853 million).

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