News this week: Earlier this week, Alibaba Group-backed courier firm, Stars Express, announced the company has filed for bankruptcy. Stars Express was previously a delivery service provider listed on Alibaba’s B2C arm, Taobao. According to a statement release by Stars Express’ founder, Chen Ping, his personal investment of US$7.9 million as well as Alibaba’s US$11 million investment have both been lost.
Alibaba first announced the purchase of a minority stake in the Beijing-based courier in March 2010, but so far Alibaba has not commented on the bankruptcy. Industry insiders believe over-expansion and inadequate franchising experience was the cause of the bankruptcy.
Chen reportedly owed two months’ worth of salary to his staff of 4,000, before communicating the news of the bankruptcy via SMS.
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