Alibaba to build national logistics network
January 31, 2013 Category Logistics, Logistics industry
Alibaba Group Holding, China’s largest e-commerce company, plans to join hands with partners to build a logistics network across China that can support CNY10 trillion worth of transactions a year within the next decade. It will take the lead in a CNY100 billion investment in the network by teaming up with industry players, banks and the biggest express delivery companies, including Chinese retailer Yintai Group and private conglomerate Fosun Group, Alibaba said. China’s logistics industry has been criticized for its inability to satisfy the great demand of e-commerce delivery. Alibaba aims to make deliveries between any two places in China within 24 hours once the network – China Smart Logistic Network – is finished. “It’s like building a road so that cars can run on it,” said Yang Lei, public relations director of Alibaba. He added that Alibaba will not do the deliveries itself, just like it doesn’t sell things itself but instead builds the infrastructure for others to sell. Alibaba and its partners will set up warehouses across China and build a data system that tracks trade and delivery information of suppliers, sellers and buyers to improve the efficiency and quality of deliveries, Yang said. A new company will be set up, and Jack Ma, Alibaba’s Chairman, will act as the Chairman, while Shen Guojun, Chairman of Yintai Group, will be CEO. Xu Yong, Chief Consultant with the express and logistics website cecss.com, said that Alibaba’s promise to deliver packages in 24 hours will be hard to fulfill. A single logistics network may also prevent Alibaba’s e-commerce rivals, such as Jingdong Mall, from joining, Xu added. Jingdong Mall, the second-biggest business-to-customer website in China, has established six logistics centers, covering more than 300 cities across China. The company is building up a warehouse and logistics system in major cities like Beijing, Shanghai and Guangzhou. Last year, China’s express delivery industry had CNY106 billion in revenue, a year-on-year increase of 40%, according to the State Post Bureau. The number of packages delivered last year increased 55% from a year earlier, and Ma Junsheng, Director General of the State Post Bureau, expected the figure to increase by 40% this year, hitting 8 billion, the China Daily reports.
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