Alibaba’s logistics arm Cainiao offers shoppers in US grouped delivery service, cutting shipping times to five days

Cainiao, Alibaba Group Holding’s logistics unit, will open a new service for consumers in the US to allow them to package several items they have bought together, cutting delivery times to as little as five days.

Cainiao said in a statement on Tuesday that the cross-border shipping service would mainly help Chinese consumers and students in the US who tend to buy lots of goods on Chinese e-commerce sites. As of 2020, there were roughly 60 million Chinese living outside the country, according to a report by Huaqiao University.

If the parcel is sent via air, delivery times may be reduced five days after the items are sent out from the warehouse. If by sea, the new service may cut the cost to as low as 12 yuan (US$1.7), depending on the size of the parcel, according to the statement.

The new overseas service comes ahead of Cainiao’s planned US$1 billion listing in Hong Kong. Alibaba owns the South China Morning Post.

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The so-called “consolidated shipping” service, covering both air and sea transport routes, will collect multiple online shopping orders placed by users on various platforms in a warehouse before shipping them from China.

Prior to its US expansion, Cainiao provided consolidated shipping to shoppers in other markets outside mainland China, including Hong Kong, Singapore and Australia.

In November, Cainiao and Alibaba were part of a consortium that made a US$57 million offer to buy Chinese logistics company Best. Best is a major courier in China and has a presence in Southeast Asia. In the third quarter of 2023, Best’s global businesses achieved revenue of US$37.7 million, contributing to 12.4 per cent of the total.

Cainiao has its eye on the overseas market, and recorded more than 1.5 billion cross-border e-commerce parcel deliveries in its recent financial year to March, making it one of the world’s top logistics services providers, according to its prospectus.

Cainiao aims to raise at least US$1 billion, subject to market conditions, according to a Post report in September that cited people familiar with the situation. The listing is part of a group-wide restructuring of Alibaba, as the e-commerce titan seeks to free up decision- making amid increased competition.

Established in 2013, Cainiao serves as the logistics backbone of Alibaba’s e-commerce empire, handling more than 4 million cross-border parcels on a daily basis in 2023. Alibaba announced it would spin off Cainiao in the restructuring announced in March.