Alibaba, partners to spend $3-4.5 bn on logistics

CHINA: Alibaba Group and its financing partners will invest $3 billion-$4.5 billion over the medium term to set up a warehouse network in China, they said in a statement on Wednesday.

Sources told Reuters in October that Alibaba Group is planning to expand its logistics network to reach 52 cities in two years from 20 cities currently.

China's e-commerce market was worth 119.1 billion yuan ($17.93 billion) in transaction value in the second quarter, of which Taobao, a unit of Alibaba, had a 75.2 percent market share.

With about 30 percent of China's 420 million strong Internet users shopping online, one of the biggest barriers to e-commerce is logistics.

Jack Ma, the charismatic founder of the company in which Yahoo Inc owns a 40 percent stake, believes that China's logistics market is fragmented and does not offer optimal customer service.