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Alibaba Focuses On Logistics Growth Beyond China To Beat Slowdown

Benzinga · 11/15/2022 11:08
  • Alibaba Group Holding Limited's (NYSE:BABA) logistics arm Cainiao recently launched its first parcel distribution center in Brazil, adding to its regional network of sorting centers in Mexico and Chile, TechCrunch reports.
  • A cooling economy and aggressive rivals like Pinduoduo Inc (NASDAQ:PDD) hurt Alibaba's e-commerce business in China.
  • For the first time, Alibaba did not disclose the sales tally for its annual "Singles Day" shopping festival, which fell on November 11 and used to come with a Super Bowl-like gala featuring pop idols and Jack Ma himself.
  • Also Read: Amazon Launches Logistics Network In India After Walmart-Backed Flipkart
  • Cainiao followed AliExpress abroad, helping the Alibaba-owned cross-border marketplace deliver Chinese goods to consumers worldwide
  • But it's now ramped up domestic services in some countries, hoping to turn local retailers into clients. Earlier this year, the logistics giant began providing express courier service in Brazil, which now spans over 1,000 cities.
  • The new facility in Brazil will likely further boost Cainiao's presence.
  • It looks to open nine more distribution centers in seven states and set up 1,000 "smart lockers" across ten cities over the next three years.
  • Smart lockers, which let customers pick up their e-commerce packages, have become common in China. 
  • In Brazil, Cainiao aims to use the infrastructure for intra-city and cross-border logistics services and food delivery in the future. 
  • One of Cainiao's smart locker clients is Piticas, a retail franchise focused on geek and pop culture products.
  • Cainiao also wants to help Brazilian merchants export goods like coffee, nuts, and propolis to China, reversing the traditional trade route
  • The company currently operates eight weekly chartered flights between China and Brazil and plans to add more air and sea routes.
  • In July, Cainiao opened its sorting center in Israel, bringing the number of overseas sorting centers to ten. 
  • As of June, Cainiao had more than 7,700 smart lockers in Europe. 
  • The logistics unit accounted for roughly 5.6% of Alibaba's revenues in the three months that ended in June.
  • Price Action: BABA shares traded higher by 10.40% at $78.75 on the last check Tuesday.