Alibaba’s Cainiao to create smart logistics network

Chinese e-commerce titan Alibaba Group Holding Ltd and its logistics unit Cainiao Network Technology Co Ltd plan to spend more than 100 billion yuan ($15.6 billion) to build out a national smart logistics network, underscoring its aggressive logistics expansion plans at home and abroad.

Jack Ma, founder and chairman of Alibaba Group, said on Thursday at the Global Smart Logistics Summit in Hangzhou, Zhejiang province, that Cainiao will ramp up the efforts to build the smart logistics network, producing profit margins for the manufacturing sector via intelligence and collaboration.

The announcement came right after Cainiao last week unveiled a smart logistics platform that uses 1 million new energy vehicles for express delivery, marking the latest move to boost its logistics capability.

According to Ma, the future national smart logistics network consists of two parts: the domestic network and the global network. The domestic one will be able to achieve 24-hour delivery nationwide, cutting China's logistics costs to account for less than 5 percent of the country's GDP. Alongside the countries and regions involved in the Belt and Road Initiative, the global one will support 72-hour delivery across the world.

"The network will serve whole logistics firms," Ma said. "Cainiao will work with various logistics companies to cope with problems relevant to the state, industrial sector and society."

According to Jack Ma, China's courier sector is set to handle 1 billion parcels per day in the next five to eight years, while few firms have developed the ability needed to deal with that huge amount.

"That's why we are calling on all express delivery firms to transform into data companies and embrace new technologies," he said.

Unlike its domestic archrival JD, Alibaba does not operate a self-owned logistics infrastructure but uses Cainiao to build a logistics network of delivery firms.

Established in 2013, Cainiao serves as a technology-driven socialized logistics collaboration platform. It connects 3 million couriers and warehouses covering 30 million square meters, helping reduce the shipping and delivery time from more than four days to two and a half days.

He Wei in Shanghai contributed to this story.