Dive Brief:

• Alibaba and its logistics subsidiary, Cainiao, announced their "strategic initiative" to invest $1.38 billion in ZTO Express and collaborate with the courier, according to a press release.
• The move is part of Alibaba's wider "New Retail" initiative, which seeks the "seamless integration between online and offline commerce."
• According to the press release, successful implementation of New Retail means developing a "smart supply chain" with "advanced logistics," hence Alibaba's investment in one of the largest couriers in the world.

Dive Insight:

Alibaba's decision to invest in and collaborate with ZTO is right on trend with e-commerce companies moving more of their supply chains in-house. Assuming more control of one's supply chain allows a company to become more nimble and flexible toward consumer demands.

Because e-commerce is such a fast-paced industry, supply chain control is critical to success. One of Alibaba's competitors, Amazon, is already toying with the idea of launching its own shipping service and is testing a "Seller Flex" service that would allow the company direct oversight of the transport of goods from fulfillment center to a customer's front door.

Earlier this year, Chinese e-tailer and competitor JD.com invested $2.5 billion in its logistics subsidiary JD Logistics to ramp up its supply chain and e-commerce presence in China. 

Alibaba follows suit to keep up with the competition as the three e-commerce powerhouses seek to become top global, streamlined and supply chain-savvy companies.