Alibaba Group, China’s largest e-commerce firm, and its financing partners plan to spend up to $4.5 billion setting up a network of warehouses across the country to tap a growing appetite for online shopping.  The $3.0 billion to $4.5 billion investment will be made over three to five years and will be aimed mainly at building warehouses and also supporting logistics firms, the company said on Wednesday. Of the 30 billion yuan ($4.5 billion) investment, 10 billion Yuan will be Alibaba’s own money..

Jack Ma, the charismatic founder of Alibaba Group, in which Yahoo Inc owns a 40 percent stake, believes that China’s logistics market is fragmented and customer service for goods bought on the Internet could be improved.

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

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

Shares in, which competes with Global Sources Ltd in China’s 1.7 billion yuan business-to-business online sector, have gained about 20 percent since the start of the year, surpassing the Hang Seng’s 6 percent gain.  Source: Press Reports