SK Holdings Co., the holding company of South Korean conglomerate SK Group, has decided to buy a partial stake in Chinese logistics firm e-Shang Redwood Group (ESR) for 372 billion won ($332.2 million), betting on the second largest logistics firm in China with the burgeoning online shopping market.

SK Holdings said Tuesday its board of directors agreed to buy an 11.77 percent stake in Chinese logistics firm ESR. The Korean company will purchase new shares worth 372 billion won.

By investing in logistics, SK is seeking to tap into the world’s biggest consumer market that is seeing a boom in online commerce thanks to a rising middle class. China’s e-commerce market is expanding rapidly at a compound annual growth rate (CAGR) of 36 percent, according to market analysts.

Established in 2011, ESR is China’s No. 2 logistics firm whose largest shareholder is New York-based private equity firm Warburg Pincus that also manages the firm. It operates 112 logistics centers in China, Japan and Singapore and is currently building one in Goyang, Gyeonggi Province in Korea.

The Chinese logistics giant has over 200 customers worldwide, including Amazon, H&M and China’s major e-commerce players Alibaba and JD.com. It has been aggressively expanding operations with a goal to become the leading logistics firm in Asia.

The stake purchase in ESR is also expected to help SK Holdings move a step closer to becoming a global investment holding company, said the firm in a release. SK Holdings is SK Group’s holding company that focuses on investment.

By Moon Ji-woong

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