Alibaba Expanding its Own Global Logistics Network

Alibaba Group one of the largest online retailers in China said, it has allocated $15.2 billion to invest in global logistics network over the next five years, is the part of Alibaba’s new retail strategy.

The company has revealed investment of $807 million in Cainiao Smart Logistics which would provide 51% stake in the company. Cainiao Smart Logistics was set up in May 2013 with other investors involved. Alibaba already had 47% share in Cainiao which would increase to 51% with an additional seat on the board of directors. Alibaba can now make decisions for the company with 4 seats out of 7.

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Alibaba is focusing on boosting logistics network and capabilities with $15.2 billion investment, the company is aimed at reducing delivery times in China and across the globe setting the benchmark of order filling within 24 hours in China and 72 hours worldwide.

The funds would be poured into R&D in logistics, data technology, building smart warehouses, smart delivery, and global logistics infrastructure.

By enhancing the logistics potential in Alibaba ecosystem and putting more money in this segment, we further enabling our new retail strategy to bring retail into one seamless experience for users. We will continue to collaborate with various logistics partners to attain this objective said Alibaba CEO, Daniel Zhang.

The Chinese retail giant operates 13 brick and mortar retail stores across China, which the company drives to be integrated with its online infrastructure to pursue its new retail vision. According to Alibaba, this would reinvent the traditional supermarkets by marrying online and offline experiences.

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Besides working as retail outlets, Alibaba Hema Physical stores also operate as order fulfillment sites for the orders placed through mobile app. Employees prepare ordered items for delivery, each store serves a radius of 3 kilometers, offering deliveries within 30 minutes of order.

Alibaba seems to be walking on the stepping stones being set by Amazon. The US retail giant has announced its new brick and mortar stores in August. A similar strategy is being adopted by Alibaba now.