Cainiao’s Revenue Jumps as it Delivers Parcels Worldwide for Price Of a Cup of Coffee

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Cainiao’s Revenue Jumps as it Delivers Parcels Worldwide for Price Of a Cup of Coffee

Cainiao cargo flights that facilitate cross-border e-commerce. Photo source: Alibaba Group

Cross-border services revenue at logistics platform Cainiao Network grew 40% in the first half of this fiscal year as a surge in online shopping in a pandemic-stricken world boosted demand for international delivery services, a company executive told investors on Thursday. 

Shipments around the world — inbound supply chain services, outbound parcel delivery and global SME freight — contributed more than half of the platform’s total revenue, Cainiao revealed for the first time on Thursday. 

Cross-border e-commerce trade volume rose 31.1% last year to hit RMB1.69 trillion ($27 billion), according to China’s General Administration of Customs, the government agency responsible for import & exports. Chinese consumers unable to travel abroad have purchased international products online while Chinese merchants have sold more abroad. 

“The pandemic has obviously posed huge challenges to the logistics industry, both in China and globally, but at the same time has created bigger opportunities and stronger demand,” Wan Lin, CEO of Cainiao Network, said during the two-day virtual investor conference.

Wan Lin, CEO of Cainiao Network, speaking during Alibaba’s Investor Day. Photo credit: Alibaba Group

China’s e-commerce exports jumped 40.1% in 2020 from a year earlier and Cainiao is riding this wave by providing affordable and efficient shipment, said Wan.

“Users can ship parcels to every corner of the world for the price of a cup of coffee,” he noted. 

Delivery for parcels within ten days costs $5 and is available in more than 20 countries, while $2 shipping will take 20 days and is available in over 50 countries. Cainiao ships more than 4 million parcels daily from China.

Global Buildout

Over the years, Cainiao has invested in an international smart logistics infrastructure to serve businesses in around 200 countries and regions, including logistics hubs, sorting centers and smart clearance systems.

“In cooperation with Tmall Global and Kaola, we have built inbound supply chain services for international merchants selling into China […so] international brands, big and small, can easily reach the Chinese market and its huge customer base,” Wan said.

The company has more than three million square meters of warehouse space under its belt for cross-border e-commerce use and at least 240 chartered cargo flights ship parcels and freight globally every month.

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Millions of parcels are processed for distribution around the world at Cainiao warehouses. Photo source: Alibaba Group

“We see globalization as a critical part of Cainiao’s strategy. [It] has been, and will continue to be, a major strategic direction for our long-term development,” he added.

In recent years, Cainiao also turned to strengthening last-mile capabilities by installing self-pick smart lockers in a number of European countries. More than 4,000 sets of smart lockers have been deployed in Russia, Spain, France, and Poland to date.

“By integrating commerce and logistics, we’re creating a differentiated capability and a differentiated experience,” said Wan. 

Additional reporting by Elizabeth Utley and Alison Tudor-Ackroyd

This article has been updated to add an additional quote from Wan Lin

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