Alibaba pushes for major investment in Chinese logistics market

In the medium-term, Alibaba and its financing partners will commit between RMB20 billion and RMB30 billion (US$3.01bn to US$4.52bn), and Alibaba hopes to spark a total investment of more than RMB100 billion (US$15.05bn) in logistics development in China by others partners in the e-commerce eco-system.

"It’s clear that logistics is a crucial link in the e-commerce eco-system and in order for Chinese entrepreneurs to reach their future growth goals, this sector needs to develop rapidly in China," said Jack Ma, chairman & CEO of Alibaba Group. "It’s also clear that everyone involved in this sector needs to work together to accomplish this."

He added: "Hopefully, within ten years‘ time, anyone placing an order online from anywhere in China will receive their goods within eight hours, allowing for the virtual urbanisation of every village across China. In order to achieve this, we will need to establish a modern, 21st century logistics network."

Alibaba’s strategy towards logistics is composed of four key parts:

• Initially, Taobao (the largest online retail website in China) will continue to deepen its pursuit of the previously announced Taobao logistics initiative to enhance quality control of delivery service. The Taobao logistics initiative consists of the Taobao supply chain management platform (e56.taobao.com) to help merchants handle inventory; logistics partnership network; and industry code of standards guiding logistics service providers. At the same time, Taobao will focus on providing relevant value-added services in accordance with product vertical-specific needs.

• Alibaba will also mobilise efforts to establish an integrated logistics platform that aims to bring together all players in the industry from warehousing to delivery.

• Alibaba will invest in the establishment of a nationwide warehouse network across China with the goal of redressing the key bottleneck facing the logistics industry.

• Finally, Alibaba.com will offer warehousing facility support to small Chinese exporters. Alibaba will coordinate closely with working partners in all sectors of the logistics industry to establish a national network of warehouse facilities to service the B2C industry across China. Usage of the Alibaba Group-owned warehouse facilities will be a service available to all, including partners in the logistics industry, Taobao sellers as well as independent B2C websites. Beijing/Tianjin area, the Yangtze River Delta and the Pearl River Delta were the regions initially selected by Alibaba for warehouse construction because of their proximity to major population centers. Initial plans are to establish warehousing facilities in these three regions totalling approximately three million square metres.