Amazon.com Serious About Its Own Air Delivery System

The retail giant is testing its own air delivery service for the transportation of parcels from the United States to the United Kingdom.

In hopes of starting its own air freight business, Amazon.com has been going back and forth to the United Kingdom since November, according to Evening Standard. The retail giant has been taking these parcels from the United States to the UK quite discretely as they don’t want the public to be aware of transportation service as yet. It has managed to transport a number of parcels, trying to get experience in the delivery service first before it makes it official in front of its customers.

As per the report by Evening Standard, there have been five flights weekly that transport these parcels from the US to the UK. The route taken by the plane is from Portland to Luton along with East Midlands and Doncaster airports. The return route that the flight is taking has been from Kassel in Germany back to Portland. The flights have been made to land close to fulfillment centers in Europe as they have been strategically worked on and would help in reducing transport cost as well.

There are two major Amazon warehouses in the United Kingdom which are located at Swansea and Dunfermline – which is as big as 14 football pitches combined. The other locations of the warehouses that are in London are Milton Keynes and Hemel Hempstead.

These flights, by the retail giant have been booked via DB Schenker which is a logistics company in Germany. The logistics company is planning on starting its operations in Italy and Spain as well, which is news that adds up to the retail business’s news of launching its own delivery service. In order to delay third party deliverers, the e-commerce company is also working on starting its own freight service due to which it is in talks with Atlas Air and Air Transport Services Group – ATSG.

The retailer had planned to start its own service by as soon as January 2016 by hiring 20 Boeing Co 767 aircrafts for in-house deliveries. In case the company starts to act on its own service by hiring these jets, it will be saving a lot of cost of its fast growing transport costs.

This news has come into attention ever since the e-retailer started to have problems with UPS – United Parcel Services. UPS was helping Amazon make its deliveries but it disappointed the company by sending in late deliveries. Given that Amazon is one of UPS’s major customers; they should really work on building a healthier relationship with the retailer.

According to the Wall Street Journal, both the executive directors of the companies have had talk regarding the fiction between the two them. Due to the increase demand during the holiday season, the retail giant needed a delivery service provider who the organization could completely rely on.

Insurance joint venture by Alibaba and Tencent Holdings to raise funds

Online insurance joint venture, Zhong An Online Property Insurance, is seeking a valuation of $8 billion.

Alibaba Group Holding Ltd and its competitors Tencent Holdings and Ping have partnered to gather funds for their joint venture online insurance according to Alibaba news.  Most of the analysts are bullish about the joint venture and said that fund raising could make an amount over $8 billion estimated target at first.

News of this plan were revolving for more than a year after the companies declared that they are joining hands to launch Zhong An online insurance company. The plan to raise funds mainly targets equity companies, and they also have plans for an IPO for the company in the year 2018.

It’s almost the end of first quarter of 2015 and we have already seen some major tech firms are looking for fund raising. Irrefutably, the prevalent news was Tencent and Alibaba seeking to get at least $1 billion in the initial stages of fundraising.

Tencent holdings and Alibaba Group have a joint market value of over $400 billion. However Peng is the 2^nd biggest insurance company. Sources told,  Zhong An has completed its deal with investors of Hong Kong and the initial round of raising $1 billion will provide 12.5% ownership in the firm.

Zhong An was established in 2013 with $162 million of finances in registered capital. The business model of the company includes cargo insurance, property insurance, guarantee insurance, and credit for the online e-commerce.

Remarkably, after 16 months the company was able to exceed its breakeven and becomes profitable. In spite of prominent credentials, analysts are anxious why the company delayed the fundraising part. Furthermore, $1 billion is a huge amount be keeping in mind that it is the initial step of the joint venture into the market.

Though, putting all the mix-up away, Zhong An has certainly come up with a tactical fundraising move . Bearing in mind the joint venture appears to be in initial stages, it has already managed to get finances of over $8 billion. Ping An –one more party of the joint venture single handedly valued at $100 billion beating competitor New China Life which is valued at $17 billion.

The venture will have a 20% ownership of Alibaba Group Holding Ltd and 15% by each Ping An and Tencent. Beside these big companies, Zhong An contained 6 more fundraisers out of which the most noticeable was Ctrip –an online travel agency.

Zhong An strategy of fundraising is similar to that of Qunar’s -a travel agent that too joined hands with Baidu Inc. and commands remarkable valuations in spite of generating continues losses.

Alibaba stock increased by 0.49% and reached $84.58 on Friday..