Alibaba Executive Chairman Jack Ma has said his group will invest billions of dollars to build the technical backbone for a smart logistics network aimed at improving delivery reach and efficiency, as well as sharply driving down costs.
The smart logistics network is aiming to unite five key cities: Dubai, Hangzhou, Kuala Lumpur, Liege and Moscow.
“This network is not only national, but global,” said Ma. “[We want to] connect every courier, connect every warehouse, every hub, every city and every house.”
According to a press release on Alibaba’s news network Alizila, Ma said the target of Cainiao Network, Alibaba’s logistics arm, is to “eventually ensure single-day delivery across China and 72-hour delivery to the rest of the world.”
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At present, Cainiao has reduced cross-border shipping times from an average of 70 days to less than 10 days for some countries.
Within China, Cainiao’s single-day and second-day delivery now covers 1,500 counties and districts.
Cainiao’s smart network should push logistics costs, which currently comprise about 15% of China’s gross domestic product, down to under 5%.
He noted the figure is around 7% to 8% of GDP in countries with more-developed logistics systems.
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Ma told an audience at a Cainiao event in Hangzhou: “If we can use data to solve the problem of low transport efficiency and high logistics costs, we can create huge profit margins for the manufacturing industry and logistics sector.
“I think this is what Cainiao and our logistics industry should do for the country.
“This network was established by Cainiao, but it doesn’t belong to Cainiao. It belongs to all logistics companies.
“Logistics companies are Cainaio’s most important partners … we need to provide our partners with core technology and core products to make our logistics partners stronger.”
Around 100 million parcels are carried using Cainiao’s logistics platform each day.