Alibaba wades into logistics biz with new company

E-commerce giant unveils Cainiao Network Technology, which it established with other investors. The new company will build a "smart" logistics system which could cost up to 300 billion yuan.
Written by Kevin Kwang, Contributor

Alibaba Group is now venturing into the logistics business after it announced the establishment of a new logistics company, Cainiao Network Technology, together with a group of investors.

The new company will be tasked to build a 100 billion yuan (US$16.1 billion) "smart" system to connect existing delivery networks and improve efficiency in delivering goods ordered online, according to a report by People's Daily Wednesday

The total investment in creating the smart logistics network could reach 300 billion yuan (US$48.3 billion) as it is expected to link hundreds of domestic cities in China, it noted. Tong Wenhong, vice president of Alibaba, said the intention will be to build a platform connecting existing logistics network with Internet infrastructure so data about packages and delivery information can be easily accessed and managed.

The initial focus will be on cities where logistics services are less developed and online orders may take days to arrive. Construction of warehouses and logistics centers is starting in a dozen cities, it added.

"We'll dedicate at least 10 years to developing the new company and hope to reduce the logistics cost for privately owned companies and small vendors," said Jack Ma, chairman of Alibaba, who will also chair Cainiao Network Technology.

Besides Alibaba Group, the other investors in the company include Yintai Holdings, Fosun Group, major courier firms and financial institutions such as China Life Insurance Group and Citic Group, the report added.

News of the joint investment was first mentioned in January this year with aim of creating 24-hour domestic deliveries a reality.


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