Chinese e-commerce company Alibaba is investing over $15 billion in global logistics. The expansion will take place over the next five years.
Alibaba has increased its investment in Cainiao, a logistics company, from 47% to 51%. As a result, Alibaba now has a majority stake in the company and has four out of seven seats on Cainiao’s board.
Daniel Zhang, Alibaba Group CEO says:
“Our commitment to Cainiao and additional investment in logistics demonstrate Alibaba’s commitment to building the most-efficient logistic network in China and around the world.”
Alibaba’s retail strategy includes the goal of fulfilling orders within 24 hours in China and 72 hours internationally across the globe. It will be enhancing its services by incorporating smart warehouses, smart delivery and a global logistics infrastructure.
Zhang goes on to explain:
“Our goal with this investment is to provide comprehensive, first-class experience for consumers globally.
“By enhancing the logistics capabilities within the Alibaba ecosystem and extending our investment in this sector, we are further enabling our New Retail strategy to bring online and offline retail into one seamless experience for shoppers.
Alibaba’s International Expansion Plans
In terms of Alibaba’s global expansion, it aims to generate 40% of its revenue from international sales in the next five years.
Back in May 2017, Alibaba reported a revenue increase of 60%. International retail sales for the first three months of 2017 tripled from 2016 to $353 million an increase of 8%, more than 30% behind its 40% target.
By improving its global logistics, it will be interesting to see how Alibaba will perform on the global stage. Particularly when it faces competition from e-commerce giants such as Amazon, eBay and Walmart.