Alibaba logistics arm plans warehouse expansion
Plans aim to streamline sending of packages across the mainland
The logistics arm of Chinese e-commerce giant Alibaba is lining up a major warehouse expansion to streamline deliveries, devoting a large slice of long-term US$16 billion investment plans to adding new space.
The business, called Cainiao, will nearly quintuple warehouse space it owns now to about five million square metres next year - easily big enough to hold New York's Central Park - president Judy Tong said.
Founded two years ago, Cainiao seeks to give Alibaba a driving role in China's fragmented package delivery industry. In partnership with delivery businesses, it crunches reams of data on everything from order trends to delivery routes and weather patterns to increase efficiency.
"People may think that an internet company shouldn't have property but Cainiao cannot just be a pure data company," Tong said, referring to Alibaba's ownership of warehouses.
"It has to be an integrated company with data and an efficient logistics network. An app can't solve the problems of logistics."
Cainiao's warehouse space will be concentrated in eight to 10 cities and form the top tier of a network of warehouses. The lower tiers of this network will be entirely run by Alibaba's partners and businesses that sell on its platforms.