Alibaba’s logistics unit Cainiao to double year-end bonus for employees, in morale-boosting move after scrapped IPO

Alibaba’s logistics unit Cainiao to double year-end bonus for employees, in morale-boosting move after scrapped IPO

Alibaba’s logistics unit Cainiao to double year-end bonus for employees, in morale-boosting move after scrapped IPO

Hangzhou-based Cainiao will launch an “entrepreneurship incentive plan” that will double the bonus pool allocated for the financial year ending March 31, 2025, according to company chief executive Wan Lin in excerpts from an internal letter seen by the South China Morning Post.

That means employees will receive their standard year-end bonus in April 2025 and another bonus equivalent to that amount in August 2025. This plan will cover all full-time employees who are active at that time and eligible for the regular year-end bonus, according to the internal letter sent to employees on Tuesday night.

A global leader in e-commerce logistics, Cainiao had a total of 14,061 employees as of March 2023, slightly down from 14,375 in 2022, according to the firm’s previous prospectus. Parent company Alibaba owns the Post.
Cainiao Smart Logistics Network chief executive Wan Lin. Photo: Alibaba

Cainiao is embarking on a “journey of entrepreneurship”, which requires the “continued collective effort and commitment of our entire team”, Wan said in the letter.

“We will focus on developing key businesses, expanding our global logistics network, building global competitiveness and becoming a leading logistics network serving customers worldwide,” he said.

The new financial incentive to Cainiao employees shows parent Alibaba’s focus on keeping morale high at an integral business under the e-commerce giant, following its decision to withdraw the unit’s IPO owing to current market conditions and certain strategic considerations.

“With the change in IPO plans, we believe that it is important to stabilise the morale of Cainiao employees to ensure smooth operations,” Joe Tsai, the chairman at both Alibaba and Cainiao, said in a conference call on Tuesday.

Cainiao Smart Logistics Network’s sprawling office-and-warehouse complex in Hangzhou, capital of eastern Zhejiang province. Photo: Shutterstock

Alibaba will deepen the integration between its logistics and e-commerce units, as part of efforts to regain market share in mainland China and expand business in international markets, according to Tsai.

In a statement on Tuesday, Alibaba co-founder Tsai said it was an appropriate time for the company “to double down on its investment in Cainiao”. Alibaba, which currently owns 64 per cent of Cainiao, has offered up to US$3.75 billion to buy the remaining stake of minority shareholders, including employees, in the logistics firm.

“We believe that this [offer], coupled with additional retention incentives, would address the issue of workforce stability,” Tsai said. The offer gives Cainiao a valuation of US$10.3 billion.

In the December quarter, Cainiao’s revenue rose 24 per cent year on year to US$4 billion on the back of its cross-border logistics services business.

With business in more than 200 countries and regions, Cainiao Smart Logistics Network operates an average of about 170 chartered flights and block space agreements with cargo carriers per week. Photo: Shutterstock

Meanwhile, Alibaba is also revamping employee incentives at its other business units to retain and attract workers amid intense competition in its industry.

The group’s new incentive scheme, which will take effect at the start of its 2025 financial year in April, allows employees to exercise their stock options quarterly instead of annually.

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