Alibaba’s Cainiao ups rivalry with SF Express by promising 24-hour delivery through couriers alliance

It can be called China speed.

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Alibaba’s logistic arm Cainiao Networks is joining hands with a group of China’s largest couriers to speed up parcel delivery in the country, according to a press statement, by providing 24-hour delivery in more places in China before an eventual national rollout.

The courier partners include ZTO, Yunda, YTO, STO, as well as Best Express. Alibaba has stakes in all of them except for Yunda.

China has been the world’s largest couriers market by business volumes for five years on end, a feat mostly spurred by the Middle Kingdom’s advanced e-commerce market. A research out in 2016 claimed that more than 80% of parcels are shipped by the country’s e-commerce businesses.

Right now it takes 22.6 hours on average for a parcel to be delivered in 26 cities in China’s affluent Yangtze River Delta region, which includes Shanghai and Nanjing, said Alibaba.

The joint-force between Alibaba and the couriers aims to bring the speed to more of China’s well-developed economic zones.

The alliance’s move will pose a direct threat to the country’s largest courier company in the private sector, SF Holding, which owns SF Express, a top brand in the courier industry best known for its timely shipping.

SF booked RMB 50 billion (USD 7 billion) in total revenue in the first six months of this year, up 17.7% year-on-year and RMB 3.1 billon in net profits, up by 40.4% year-on-year.

Its entire revenue is much bigger than other couriers such as US-listed ZTO, which made RMB 1 billion in revenue in the first half of this year.