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Alibaba’s logistics unit Cainiao to expand overseas reach and speed up delivery times

The company’s app, Cainiao Guoguo, has over 200 million users.

Photo: Shutterstock.com

Cainiao, the logistics arm of Chinese e-commerce powerhouse Alibaba (NYSE: BABA), is set to increase its global expansion with 1,000 new chartered flights in the next nine months, while also doubling its overseas warehouse network to two million square meters in three years, the company announced on Tuesday during its Global Smart Logistics Summit.

The logistics giant said it will invest RMB 1 billion RMB (USD141 million) to upgrade its logistic network infrastructure, which will allow international air-freighting time to be reduced to three to five days, from the current seven to 10 days.

Foreign businesses exporting to China will be able to leverage the firm’s 14 export warehouses and Cainiao’s partnership with over 30 customs clearance facilities to expedite deliveries, said the company, allowing 90% of cross-border orders to be fulfilled within 72 hours in China.

“Our investment to establish a global smart logistics network, including international shipping routes and warehousing facilities, will provide businesses with greater operational efficiency, cost savings, transparency, and accuracy in their supply chain management,” said Wan Lin, Cainiao’s president.

Wan also highlighted during the summit that the company’s app, called Cainiao Guoguo, has reached 200 million users. For the recent 618 mid-year online shopping season, Cainiao delivered 70% of Tmall parcels as of June 18, according to the company.

Read more: Chinese shoppers break sales records during 618 online festival

China digest

Cainiao was co-founded by Alibaba, together with department-store chain Intime and Chinese industrial conglomerate Fosun International (HKSE:0656) in 2013, as Alibaba moved to tighten its grip on the logistics sector and increase delivery efficiency, providing more solutions for its shipping partners including STO Express, ZTO Express, and YTO Express.

The e-commerce giant lifted its stake in Cainiao to 63% from 51% by investing an additional RMB 23.3 billion (USD 3.33 billion) in November 2019. Fosun International has been in talks with Alibaba and other investors over the past few months to sell a stake worth USD 1.3 billion in Cainiao, Reuters reported on Tuesday, citing people close to the matter.

In May, Cainiao, together with cross-border delivery service provider 4PX Express, launched an international postage service focused on global shipments of “essential items,” KrASIA reported.

During the COVID-19 pandemic, the firm has sent over 130 million parcels of medical supplies to 150 countries across the world, according to Wan.