Through Cainiao, Alibaba is trying to take a lead role in developing China's fragmented package delivery industry, as e-commerce spreads beyond urban hubs and requires a more robust logistics network.
In partnership with delivery businesses, Cainiao crunches reams of data on everything from order trends to delivery routes and weather patterns to increase efficiency.
Last March, Cainiao completed its first funding round, raising around 10 billion yuan ($1.53 billion). Investors included Singapore's Temasek Holdings and GIC Pte Ltd , Malaysia's Khazanah Nasional Bhd, and China's Primavera Capital.
Noted short-seller Jim Chanos of Kynikos Associates, who has been betting on a huge decline in Alibaba shares, last year called Alibaba's delivery and warehousing infrastructure "a risk," according to a report he sent out at a conference last November which was seen by Reuters.
Alibaba "appears to control Cainiao via 48 percent stake and consolidates the results via equity method," Kynikos said. "Cainiao's business is capitally intensive. It is unclear how much of this capital will be spent by Alibaba versus the delivery partners."
Hedge-fund manager John Hempton of Bronte Capital, who has been shorting shares in Alibaba, said the company's accounting for acquisitions was, "The next shoe to drop."
Up to Tuesday's close, Alibaba's stock had fallen 12.3 pct in the last 12 months. On Wednesday it fell 6.8 percent to $75.59. ($1 = 6.5550 Chinese yuan renminbi)