Alibaba to Invest Billions for 3-Day Delivery Around the World
Alibaba’s Cainiao Network unveiled a “smart” system to digitize warehouses and create a network that would someday ensure three-day delivery across the globe.
Jack Ma announced that his company, Alibaba Group Holding Ltd. (NYSE: BABA), China's e-commerce behemoth, will invest billions of dollars into logistics to minimize delivery time in China and around the globe to under three days.
At the Global Smart Logistics Summit in Hangzhou on Thursday, Alibaba's logistics company, Cainiao Network, revealed a "smart" system to accelerate the operations of its warehouses. While traditional facilities heavily rely on physical labor, Cainiao has equipped its logistics with self-charging robots and mechanical assembly lines using edge computing and artificial intelligence, according to the company's website, Alizila.com..
At the summit, Ma said that Cainiao would eventually ensure single-day domestic delivery and three-day delivery to the rest of the world.
Currently, Alibaba's logistics company has reduced cross-border shipping times from an average of 70 days to less than 10 days for some countries. Within China, 1,500 counties and districts now enjoy Cainiao's single-day and second-day delivery.
The smart system would lower the costs of logistics, which currently comprise about 15 percent of China's gross domestic product (GDP), down to under 5 percent, the company said. The figure is even less than the 7 to 8 percent of GDP that countries with more advanced logistics systems currently have.
"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," Ma said at the event in Hangzhou, according to Alizila.com.
Ma also said that 12 years ago, nobody believed his prediction that 1 billion packages would be shipped in a year.
"We have to think clearly today. We must understand what infrastructure is needed to support 1 billion parcels a day," he added.
The stock of Alibaba closed Friday at $204.34 per American depositary share, up 3 percent in New York.