Cainiao’s Rise to One of the Top Four Logistics Players Globally
The platform model has allowed Cainiao to rapidly scale its logistics services for businesses and consumers
Platform companies’ rise is a phenomenon most commonly observed in this decade. But a more interesting take on that is the data-sharing model as recently discussed in a Harvard Business Review article on effective digital collaborations, where companies undertake data sharing via horizontal partnerships.
Since Cainiao’s founding in 2013, we have embraced this unique business model and the power of an open platform to rapidly establish industry partnerships and scale our logistics services for businesses and consumers. These horizontal partnerships meant that we are able to capitalize on the wealth of experience of established companies and aggregate a diverse range of logistics resources ranging from chartered flights, trains, cargo ships to local last mile fulfilment service providers to support cross-border shipment, trade and minimize supply chain disruptions.
As a result, businesses and consumers benefitted from a more stable and diverse logistics service, with greater transparency and competitiveness in pricing and customer service.
Making it Easier to do Business Anywhere
This is in line with our mission is to make it easier to do business anywhere.
Due to the complex nature of supply chain and cross-border logistics, SMEs often face pain points such as cooperation along the value chain, cost management and real-time tracking.
To mitigate these pain points, Cainiao’s business model facilitates the digitalization of the logistics value chain that encompasses a seamless first-mile, line-haul shipping, overseas warehousing, customs clearance and goods inspection process, connecting merchants, logistics firms and consumers to establish a globalized supply chain and parcel network.
As such, whether the SME is looking to improve customer experience with faster order fulfillment, reduce shipping costs to increase price competitiveness or export to more countries without on-the-ground operations, Cainiao’s logistics infrastructure such as bonded warehouses, regional logistics hubs, international shipping routes and chartered flights will be able to support different requirements to drive business success.”
To businesses and consumers, Cainiao’s logistics platform becomes a single-source of truth that eventually eradicates traditional supply chain inefficiencies, and integrates technology across the entire value chain to drive greater cost efficiencies.
Growth Propelled by the Burgeoning Digital Economy
Today, smart logistics has risen to become a key building block of the world’s digital economy, with market size growing alongside that of the burgeoning digital economy. The total revenue of the logistics industry maintained rapid growth at RMB 10.3 trillion in 2019, up 9 percent year on year. This year, despite the trade and supply chain disruptions caused by the pandemic, China’s import and export volume grew by 34.7% in the first quarter of 2020.
This represents a shift from container shipping to parcel shipping, with the latter being a more convenient option to move a product directly from Point A to Point B without the need for warehousing in between. The increase in parcel volume could be attributed to the introduction of new shipping services that cater to SMEs’ cross-border trading needs, which plug an existing market gap as traditional international freight forwarders mainly focus on servicing individuals and large organizations.
Cainiao is Now Top Four
Our role in supporting eCommerce activities and consumer needs have helped us to become one of the top four logistics players globally based on daily cross-border parcel volume.
This finding is based on the 2019 annual reports released by key logistics players, where the daily cross-border parcel volume handled by UPS, Fedex and DHL was 3.19 million, 3.3 million and 1 million respectively.
What’s Next?
Drawing on two of Alibaba Group’s core values — “Customers first, employees second, shareholders third” and “Change is the only constant”, there is no doubt that we will continue to evolve the business in a manner that best suit our customers’ changing needs.
Evidently, logistics industry has transformed tremendously. With the advent of new technologies, coupled with rapidly evolving business and consumer landscape, challenges are abound and opportunities lie ahead for us to effect real change through the complete digitalization of the entire industry.
