Sources: Alibaba's logistics division wants to raise at least one billion dollars through IPO

Cainiao Network Technology Co., the logistics division of Chinese giant Alibaba Group Holding Ltd., plans to file an initial public offering (IPO) on the Hong Kong Stock Exchange this week, sources cited by Bloomberg say.

The company is aiming to raise at least $1 billion from the stock sale, according to the sources.

A representative of Cainiao declined to comment on what was published by Bloomberg on Friday.

Earlier this year, Bloomberg News reported that Alibaba's logistics division was working with banks, including Citic Securities Co., Citigroup Inc. and JPMorgan Chase & Co. for the preparation of the IPO. China International Capital Corp. has relinquished its role in the offering due to conflicts of interest, being a joint sponsor of J&T Global Express Ltd., another logistics firm that will seek approval to list in Hong Kong this week, according to sources cited by Bloomberg.

Alibaba was part of the creation of Cainiao in 2013, an entity that provides logistics services for its Chinese online markets. Later, the Chinese tech giant took control of the business. The division followed Alibaba's footsteps into the global e-commerce arena, handling parcels for millions of merchants and brands on platforms such as AliExpress and Lazada in Southeast Asia. Cainiao operates over 300 international routes in partnership with over 3,000 logistics service providers.

On the other hand, according to Bloomberg, Alibaba is putting the Hong Kong IPO of its Freshippor grocery chain on the back burner amid weak investor sentiment towards the consumer segment. The company is waiting for a more favorable market before going ahead with the Freshippo IPO.

Freshippo has over 300 stores in China, in 27 cities. Since the beginning of this year, Freshippo has partnered with 33 retailers globally, according to producereport.com. In addition, the company revealed a plan to create eight purchasing centers around the world, with the aim of sourcing premium products from a global level.

In early 2022, Freshippo considered its financing at a $10 billion valuation. The valuation was later reduced to $6 billion due to the stock market decline and capital shrinkage.