Zhejiang Cainiao, Supply Chain Management, of which Alibaba owns 48%, is angling toward a future initial public offering to help bankroll that expansion, President Judy Tong said Friday in Hangzhou, China. The company is now erecting delivery hubs centered around five of China’s largest cities, including one in the vicinity of Beijing that will span an area equivalent to 37 football fields.
Cainiao has set its sights on extending a network reaching the US, Russia, Brazil and Spain to complement existing bases in seven countries, including Amazons home turf. The quintet of Chinese delivery centers will underpin a rural network that can spirit packages to 100,000 villages within three years. It will service external clients and even other ecommerce websites, Tong added.
The hub outside China’s capital will span 200,000 square meters (2.2 million square feet), larger than the fulfillment centers Amazon has become known for. Alibaba is relying on the shipping company to support a march into the countryside and across borders, as competition with JD.com Inc. intensifies at home and it seeks to get half its revenue from outside of China.
Cainiao has 700 employees, half of which focus on technology. The company runs its own warehouses while also operating as a network overseer, using software to marshal trucking, shipping and delivery firms to get packages from seller to buyer. Alibaba created Cainiao in May 2013 with department store chain Intime Retail Group and industrial conglomerate Fosun International, which own a combined 42%t of the company.
The trio led an initial CNY 100 billion (USD 16.1 billion) investment into a delivery network that can now handle 30 million packages a day across the country. Tong envisions Cainiao supporting daily package deliveries of 200 million. An expanded network will also help Chinese sellers get their goods overseas, focusing on Russia, Brazil and the U.S, said Tong. Cainiao already has overseas warehouses in the US and Germany through partners.
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