Two logistics companies have pulled off a rare cross-border deal between a mainland China and a Hong Kong start-up, and consolidated two of Chinese tech group Alibaba’s investments in the process. The deal will see Hong Kong’s GoGoVan slot together its operations in the territory, Taiwan and Southeast Asia with 58 Suyun’s business in China. The latter being bigger, will control the combined group.
The duo operate on an asset-light model, much like Uber, allowing customers to hire a fleet of vans for removals and deliveries. Together they say they will create an intra-city logistics and freight online platform worth more than $1bn.
“Everyone knows Tencent and Alibaba are putting a lot of focus on logistics, and we are in the short-distance intra-city business,” said Steven Lam, founder and chief executive of GoGoVan, who will become chief executive of the combined group.
The combined business will be known as 58 Suyun in China and GoGoVan overseas, reflecting the two entities’ geographic franchises. 58 Suyun operates in 100 cities in China, mainly serving consumers, while GoGoVan services businesses in eight cities in China as well as Hong Kong, Taiwan and Southeast Asia.
“As Chinese ecommerce goes overseas, they will need this type of delivery,” said Xiaohua Chen, founder and chief executive of 58 Home. Mr Chen will become chairman of the combined entity, which is eyeing an initial public offering in Hong Kong next year.