Cainiao Network, the logistics arm of Alibaba Group, is pursuing overseas expansion, citing the growing e-commerce market worldwide, with most of the shipments coming out of China.
The Chinese logistics firm said the Covid-19 pandemic and the restrictions that came with it have increased the public’s appetite for e-commerce, prompting logistics providers to expand their operations to serve this growing segment.
“Globally, we have witnessed the growth of the e-commerce market as a result of the pandemic,” a Cainiao spokesperson told Asia Cargo News. “The pandemic has changed people’s consumption habits, where more people have started to shift to online platforms to satisfy their daily needs.”
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“The pandemic has also led to a certain level of economic slowdown which further drives consumers to look to online platforms for cheaper, yet good quality products,” the firm added.
South Africa, Middle East expansion
In South Africa, which it earlier tagged as an “emerging market” for Cainiao, the Chinese logistics company said it is looking to grow its presence and capacity in the region in the near term.
In June, Cainiao launched its first air cargo route between China and Africa via Nigeria, citing continued growth in bilateral trade between the two countries. The service sought to reduce total shipping time from 45-50 days to just 25 days.
It said Nigeria was the largest buyer of Chinese goods in 2019, followed by South Africa and Egypt. In terms of e-commerce, Cainiao said it saw a 163% year-on-year growth in cross-border e-commerce parcel volume between China and Africa in May.
“As one of Cainiao’s key emerging markets, Africa has witnessed a booming demand from local consumers purchasing items such as apparel, home appliances and electronic accessories from China,” it added.
Cainiao has also set its sights on building its Middle East presence. The firm said while shipping was disrupted for a month during the peak of the pandemic in the Middle East last year, the service resumed thereafter and “has been stable since.”
“We have since focused our efforts on strengthening the logistics services and network in the region to ensure greater stability,” the Cainiao spokesperson told Asia Cargo News, adding that in June this year, it also established a Dubai transit center in Dubai to transport goods from Dubai to neighbouring countries.
Demand for comprehensive logistics
Moving forward, the Chinese logistics company signalled optimism for its business despite current disruptions fluctuations caused by the pandemic.
“We remain very optimistic about our business and operations this year despite the disruptions and other external factors,” Cainiao said. “The disruptions have only further reaffirmed our business model where we have continued to deepen our approach in a hybrid model comprising both partnerships, while also embracing owned assets in the form of our regional e-Hubs that bring about greater stability, efficiency and control along the value chain.”
“Globally we are witnessing a growing demand for more comprehensive logistics and supply chain infrastructure,” it added. “While we have a presence in over 224 countries and regions worldwide, efforts are still ongoing to deepen our reach.”
Cainiao also noted expectations of continued e-commerce growth to boost its operations.
“We are seeing e-commerce platforms investing more into their business and infrastructure to support this continued growth in demand. This has brought about enhanced customer experience which further fuels demand and consolidates the new consumption habits,” the Cainiao spokesperson said.
