An inside look at Cainiao's intelligent warehouse. Photo credit: Alibaba Group

Alibaba Group’s logistics arm Cainiao Network vowed to increase end-to-end delivery fulfilment in the year ahead across China at an annual industry summit in Hangzhou this week, as the platform develops its global postal service.

Cainiao Open Week is a hybrid online and offline conference featuring panels of business leaders, scientists, and Alibaba executives talking about the logistics industry and the business outlook.

This year, end-to-end deliveries, when a parcel makes it from the sender to recipient through Alibaba services without third-party intervention, was in the spotlight.

Last-mile delivery is the Achilles heel of logistics companies; house-to-house stops are slow, labor intensive and account for up to 28% of total shipment cost, according to research group Euromonitor International. 

“To safeguard a stable and smooth logistics and supply chain, adopting a holistic end-to-end mindset is essential,” Alibaba Group Chairman and CEO Daniel Zhang told the event’s audience.

Making this vision a reality is increasingly difficult due to insufficient manpower and rising costs.

Earlier this year, the government ranked couriers as one of the jobs hardest hit by labor shortages. They hold crucial roles in a nation-wide postal operation that processes nearly 300 million packages every day, according to China’s State Post Bureau.

But Cainiao has a plan.

The platform guarantees doorstep deliveries in China for all purchases made on Alibaba’s B2C marketplaces Tmall Global and Tmall Supermarket. This guarantee has spurred demand.

“Tmall Supermarket saw its customer repurchase rate spike 30% since we rolled out a money-back guarantee for doorstep delivery a year ago,” Cainiao President Wan Lin said at the event.

Roughly 160,000 “Cainiao Post” pick-up stations across China, manned by over 300,000 service personnel, give shoppers in over 200 cities a variety of delivery and pick-up options.

Consumers can opt to pick up parcels from lockers or nearby postal hubs, while a pilot program with domestic carriers will allow shoppers in three cities to select their preferred delivery mode when placing orders on Tmall.

Cainiao also pledged to revamp its service for international merchants, including more logistic centers in Malaysia, Belgium and Hong Kong, and add warehouses in Southeast Asia.

Merchants are able to track their parcels on Cainiao Application, a feature that was only accessible to consumers. The whole supply chain gets visualized this way.

“Operation, globalization, and digitalization remain the three pillars for our business in 2022,” said Wan.