JD.com and Alibaba are reportedly engaged in a bidding war for British parcel delivery company

Chinese e-commerce giants JD.com and Alibaba are reportedly competing for the services of British parcel delivery company Evri.

According to various reports this year, Evri’s majority owner, private equity firm Advent International, is working with advisers on strategic alternatives for the delivery company, including a possible sale of the business. The company is said to be worth around £2 billion ($2.56 billion) including debt.

Both Chinese tech giants operate their own logistics units to bolster their vast e-commerce operations, with Alibaba managing the Cainiao segment and JD.com operating its JD Logistics division.

Other potential bidders include Polish parcel delivery company InPost and private equity firm Apollo Global Management. JD.com is in the second phase of bidding, according to Reuters, after submitting a non-binding offer last month.

At first glance, JD.com seems a more likely suitor due to its partnership with Evri, which began in January. This partnership should benefit European companies that sell their products through JD.com’s marketplace, giving them greater access to the Chinese market and its consumers. Through the deal, JD.com will improve its collection services for brands and companies based in Europe and the UK. The services include local collection, storage, international transportation, access to Chinese bonded warehouses, customs clearance and comprehensive delivery across China.

In the run-up to the Evri deal, JD Logistics has significantly increased its international shipping, launching an express service in December 2023 that will enable one-way deliveries from China to 23 countries in North America and Europe.

The company has warehouse operations offering same-day fulfillment services in European markets, including the UK, Germany, the Netherlands, France, Spain and Poland, and now says it can offer two- to three-day delivery in 90 percent of regions in the US.

This follows on from its current partnership with Evri, which will see JD.com integrate its self-operated warehouses into Evri’s local distribution network across Europe. Evri’s partners use JD.com to gain more insight into the Chinese market, including consumer behavior, marketing and pricing strategies, product selection advice, and online retail operational strategies. This partnership initially focused on beauty and apparel, areas where JD.com says it has “substantial” insight into its customers’ shopping preferences.

JD.com – not to be confused with British footwear and sporting goods retailer JD Sports – has been eyeing companies in the market lately. In February, the e-commerce giant considered acquiring electronics and home appliance retailer Currys. But just a month later, JD.com withdrew the acquisition plans.

Main competitor Alibaba would itself have a strong incentive to bring Evri under the Cainiao umbrella, as it too wants to attract more European companies to the Chinese market. According to Alibaba, Cainiao’s average parcel volume in fiscal year 2024 was more than 5 million parcels per day.

Cainiao’s “smart logistics network,” as the Chinese online marketplace calls it, covers a wide range of logistics functions, including first-mile pickup, long-distance transportation, customs clearance, sorting and last-mile parcel delivery for merchants in China and abroad. The company touts a 98 percent on-time delivery rate. Alibaba says it can track packages and analyze shipping trends in 224 countries and regions around the world.

The speculation about a deal comes at a time when Evri itself is making some new investments to strengthen its supply network.

Last month, Evri unveiled broader plans to invest £19 million ($24.3 million) to accelerate the rollout of electric cargo bikes in the UK.

Next year, Evri will increase its fleet of e-cargo bikes from 33 to 99 and increase the number of its electric vehicles (EVs) from 168 to 270. The company aims to grow its fleet of electric cargo bikes to 3,000 over the next decade. This is part of wider plans to reduce carbon emissions across its network and become a carbon-neutral company by 2035.

Evri also recently jumped on the artificial intelligence (AI) bandwagon, announcing in June that the company had invested £1 million ($1.3 million) in a new AI strategy.

The strategic investment will focus on improving customer service, including smarter use of data, improving parcel security and optimizing employee productivity. In the future, Evri will also investigate and test the use of augmented reality headsets to significantly reduce the time it takes to recruit and train new couriers.