Dive Brief:

• Alibaba's logistics unit, Cainiao Smart Logistics Network Ltd., will keep prioritizing growth over short-term profits, CEO Judy Tong has told investors.

• The group only wants investors who will back the model, Bloomberg News reports.

• The losses have helped lead to a U.S. investigation into why Alibaba reports Cainiao's results separately from the parent company.

Dive Insight:

In an unusual move for a large online retailer, Alibaba and a small group of initial backers created Cainiao in 2013. It has been building warehouses and distribution centers throughout China.

But, as Amazon and other retail giants have a strong control over their distribution, Alibaba has chosen to outsource its distribution instead of owning its own transport network. According to Alibaba executives, they prefer a less capital-intensive model they can scale up when necessary rather than risk having their centers slow down and the costs that come with it.

Tong is "being picky" with investors, Bloomberg reported, looking for backers who will support the longer-term strategy. But the move also makes it easy for some investors to be skeptical of whether this provides a true picture of how the Alibaba is performing overall on a head-to-head basis with its competitors.