Alibaba’s Cainiao Wants Backers Who Don’t Mind Losses

Alibaba Group Holding Ltd.’s delivery affiliate will continue to prioritize growth over profits as it builds the logistics network at the heart of the Chinese e-commerce giant’s global expansion.

While Cainiao Smart Logistics Network Ltd. needs funds to continue its investment in its distribution network, it only wants the backing of investors who endorse its model of incurring short-term losses to build scale, Chief Executive Officer Judy Tong told partners at a conference in Hangzhou. Those losses have prompted a U.S. investigation into why largest shareholder Alibaba doesn’t fully fold the smaller company into its own results. But she said both companies have provided data to prove they’ve played by the rules.