Alibaba's Cainiao to Roll Out 5-Day Delivery Service Globally
Alibaba Group, 6/28/23
Cainiao Network, the logistics arm of Chinese e-commerce giant Alibaba Group (NYSE: BABA; 9988.HK), pledged today to deliver cross-border parcels within five working days, which it said would be 30% faster than the industry standard. Cainaio is partnering with Alibaba's AliExpress, a marketplace where global consumers buy directly from Chinese manufacturers, to launch the service.
Cainiao also unveiled a self-operated premium express service in China under the brand name Cainiao Express.
"The goal is to provide quality and competitive logistics services to our consumers, merchants, platforms, and logistics partners," said Cainiao's CEO, Wan Lin, at the company's annual global smart logistics summit in Hangzhou, China.
Alibaba said in May that Cainiao could pursue an initial public offering within 12 to 18 months. The e-commerce giant holds a 67% equity interest in Cainiao, while other shareholders include strategic investors in the logistics industry and global institutional investors.
"Alibaba Group will always firmly support the long-term development of Cainiao," said Joseph Tsai, Alibaba's Executive Vice Chairman and Cainiao's Chairman, who also spoke at the summit via video link.
The Decade Ahead
Wan spoke about the opportunities for Cainiao in the coming decade, including the demand created by fast-growing content e-commerce, the globalization of Chinese enterprises and the advance of technology, particularly in the field of artificial intelligence.
Focusing on the year ahead, Wan said priorities include accelerating global express services, deepening its logistics capabilities in key overseas markets, upgrading domestic express services, and developing tiered domestic supply-chain products.
Cainiao Express features half-day delivery and doorstep delivery. China's second-largest brewer, Tsingtao Brewery, high-tech supermarket Freshippo and department store operator Intime Department have already signed up for the service.
"These high-quality and faster logistics services cater to market demand for timely fulfillment and better user experience. We believe this should enhance Alibaba Group's competitiveness in its consumer-side and enterprise-side businesses," said analysts at CICC, an investment bank, in a report.
Cross-border Commerce
Cainiao and AliExpress will, step-by-step, deliver cross-border parcels within five working days by streamlining its first-mile pick-up, line haul, overseas distribution, and last-mile delivery.
To deepen its logistics capabilities outside of China, Cainiao will focus on Europe, North America, and Southeast Asia with a target of establishing one to two local warehousing and distribution centers a year.
Cainiao acquired a small local express company in September last year. It now delivers to 60% of the country and is still expanding.
Keywords: overseas Cainiao Express e-commerce Internet AliExpress logistics Joseph Tsai Alibaba Group Wan Lin Cainiao BABA 9988.HK
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