HANGZHOU - Chinese e-commerce powerhouse Alibaba and its logistics arm Cainiao have agreed to invest $1.38 billion in exchange for an about 10 percent equity stake in delivery company ZTO Express.

The agreement, announced on Tuesday, will see Cainiao and ZTO deepen their collaboration in the transformation of China's logistics industry, Alibaba said in a press release.

The investment will further support both Cainiao and ZTO's focus on building up first and last-mile pickup and delivery capabilities, warehouse management, cross-border logistics and technology-driven smart solutions, according to the press release.

"ZTO has been an important partner to Alibaba Group and Cainiao Network in the development of the new digital economy," said Daniel Zhang, CEO of Alibaba and chairman of Cainiao. "This strategic investment will strengthen synergies across our mutual businesses to create new value and improved experiences for merchants and customers."