Alibaba inks deal with US Postal Service as China's e-commerce juggernaut sticks to global expansion script amid domestic slowdown

PUBLISHED : Wednesday, 16 September, 2015, 6:00pm
UPDATED : Wednesday, 16 September, 2015, 6:10pm

Cainiao, the logistics arm of Chinese internet titan Alibaba Group, is teaming up with the United States Postal Service (USPS) to develop new international shipping solutions that will help expand e-commerce services between China and the Americas.

In a memorandum of understanding announced on Wednesday, Cainiao and USPS agreed to collaborate on speeding up the delivery of merchandise bought by consumers across North and South America from AliExpress, the global online shopping platform of Alibaba.

"As cross-border e-commerce grows rapidly, it is critical that we evolve shipping services to the next level, with shorter delivery times and easier methods to track a shipment," Cainiao vice-president Wan Lin said.

"Today’s announcement is a key part of Alibaba’s globalisation strategy, and our vision to enable consumers around the world to enjoy the convenience and benefits of e-commerce."

Alibaba had earlier forged cooperation agreements with Singapore Post and the Spanish postal service.

In cross-border e-commerce, online shoppers purchase goods directly from overseas merchants and manufacturers who ship their orders straight to consumers’ homes.

The global business-to-consumer, cross-border e-commerce market is forecast to reach US$1 trillion in 2020, up from US$230 billion last year, according to data from professional consulting firm Accenture and AliResearch, the research unit of Alibaba.

National carrier USPS, which has more than 600,000 employees, delivered more than 155 billion pieces of mail last year and generated nearly US$68 billion in revenue.

Cainiao, formerly known as China Smart Logistics, was co-founded by Alibaba in May 2013 with a consortium of logistics companies based in mainland China. Alibaba has a 48 per cent stake in Cainiao. 

The collaboration between Cainiao and USPS aims to develop a system that will improve the way goods purchased from mainland China are processed, handled and delivered in the US and other markets in the Americas. 

That will entail the integration of the USPS system into Cainiao's proprietary logistics information platform, which provides real-time access to information for both buyers and sellers, as well as links to various logistics providers, warehouses and distribution centres in mainland China.

In 2013, Cainiao drew up US$16.1 billion in investment plans over the next five to eight years, largely involving the development of new warehouse space in China.

The Cainiao network, which includes 15 logistics services providers in mainland China, currently handles more than 30 million packages each day.