Alibaba steps up logistics initiative
July 1, 2014 Category Logistics, Logistics industry
Hangzhou-based Alibaba, the leading online retail services provider in China, has unveiled a strategic cooperation pact with China Post to jointly develop a “smart” logistics network in the country. The two sides agreed to deploy resources in the areas of warehousing, processing and building a “public services platform” that integrates China Post’s massive infrastructure and Alibaba’s more than 10,000 service outlets in the country. Before its initial public offering (IPO) in the United States, Alibaba has launched its own shopping site there called 11 Main Marketplace, developed by U.S. subsidiaries Auctiva and Vendio. The e-commerce firm also agreed to collaborate with the government of Italy, through its Ministry of Economic Development, to foster greater trade opportunities for Italian brands in China. It marked the second trade-related pact forged by Alibaba with a foreign government, following its cooperation deal with UbiFrance and the Invest in France Agency. “Alibaba has shown that it is keen to develop a vast logistics infrastructure to support China’s fast-growing online shopping market, while preparing the company for international expansion,” said Ricky Lai, Analyst at Guotai Junan International. “These developments could help increase Alibaba’s valuation.” In December, Alibaba accelerated efforts to expand its logistics capabilities through its HKD1.86 billion deal to buy a stake in Goodaymart, the logistics arm of Haier Electronics. Alibaba also formed the Cainiao Network Technology consortium in May last year with various courier services providers. This enterprise plans to invest as much as CNY100 billion over five to eight years to build a country-wide logistics network. The agreement with China Post could help drive further domestic and international expansion for Alibaba. China Post’s resources include 52,000 postal outlets, 40,000 Postal Savings Bank branches, 150,000 postal delivery workers, 50,000 direct-sales staff, 80,000 postal vehicles, 433 train carriages and 18 cargo aircraft, the South China Morning Post reports.
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