Alibaba logistics arm Cainiao rolls out half-day express delivery service in 8 major cities, as firm seeks to help stimulate consumption

Cainiao Express service is now available in Shanghai, Hangzhou, Shenzhen, Guangzhou, Dongguan, Foshan, Huizhou and Chengdu
The half-day delivery service will soon expand to seven other Chinese cities

Alibaba

Tracy Quin Shanghai

Published: 9:00pm, 3 Aug 2023

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Cainiao Network, the logistics arm of Alibaba Group Holding, has rolled out its half-day express delivery service in eight major Chinese cities, including Shanghai, Hangzhou and Shenzhen, as it ratchets up efforts to help stimulate domestic consumption amid the country’s gloomy economic outlook.

The new Cainiao Express service, part of initiatives unveiled by incoming Alibaba chairman Joe Tsai in June, was launched in collaboration with the group’s Tmall Supermarket and also covers Guangzhou, Dongguan, Foshan and Huizhou in southern Guangdong province and Chengdu in southwestern Sichuan province, according to a Cainiao statement released on Wednesday.

Cainiao Express will deliver before 9pm when a consumer places an order before noon, while an order made before midnight will be delivered before noon of the next day.

Cainiao said the service will soon expand to seven other cities, without elaborating. Alibaba owns the South China Morning Post.

Cainiao Network. headquartered in Hangzhou, in June set a logistics industry benchmark with the launch of its “5-day Global Delivery” service, which pledges to deliver cross-border parcels within five working days. Photo: Handout

During its Global Smart Logistics Summit in June, Cainiao pledged to implement half-day, same-day and next-day door-to-door delivery across 300 Chinese cities.

With the express delivery service, Cainiao also promises to compensate consumers for any delivery delays or damage caused during shipment.

The company’s express-service push underscores the high stakes involved in China’s vast package delivery market, which is dominated by SF Holding, ZTO Express and JD Logistics.

More than 60 billion packages were delivered across mainland China in the first half of this year, representing growth of 17 per cent over the same period in 2022, according to data from the State Post Bureau.

During China’s recent 618 shopping festival, which started late May and concluded by mid-June, more than 400 million packages were collected each day, despite weak consumer spending in the world’s second-largest economy.

Alibaba logistics unit unveils express service to improve e-commerce efficiency

Cainiao’s roll-out of its express service followed the launch last month of its new delivery programme between mainland China and Hong Kong. Packages sent from Cainiao’s warehouses on the mainland are delivered to the city the next day. The firm offers up to 60 yuan (US$8.35) in compensation for each order delivered outside that 48-hour window.

The Hangzhou-based company, which has become one of the fastest-growing businesses of Alibaba, said in May that it expected to pursue an initial public offering in the next 12 to 18 months.

Later that month, Alibaba announced the overhaul of its US$257 billion tech empire. The e-commerce giant will report its latest quarterly earnings on August 10.

Cainiao’s revenue grew 18 per cent year on year to 13.6 billion yuan in the March quarter, accounting for 7 per cent of Alibaba’s total revenue in that period. That growth was primarily driven by increased revenue per order from international fulfilment solution services and strong demand for consumer logistics services.

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