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Alibaba Leads "China Smart Logistics Network" Initiative

Sina Tech, 1/24/13

Chinese e-commerce conglomerate Alibaba Group held a closed-door meeting with industry enterprises and capital and finance organizations on January 23. A strategic consensus was reportedly reached at the meeting regarding the joint construction of a "smart logistics" network backbone capable of supporting an average RMB 30 bln in online sales per day (roughly RMB 1 trln per annum) and of providing guaranteed 24-hour delivery to any location in China.

A source present at the meeting said that the plan will be called the "China Smart Logistics Network." In addition to Alibaba Group and Chinese department store chain Intime Group (1833.HK), Shanghai-based strategic investment firm Fosun International (0656.HK), Fuzhou-based telecom communication service provider Fuchun Communication (300299.SZ), major logistics companies (STO Express, Worldwide Express, ZTO Express, HT Express, Yunda Express, and SF Express), and leading capital market organizations, banks, and financial organizations will be involved in planning. Alibaba Group will lead the project, for which Alibaba founder and CEO Jack Ma is expected to serve as chairman and Intime Group chairman Shen Guojun is expected to serve as CEO.

Another industry source revealed that a number of China Smart Logistics Network-related efforts are already underway, including the registration of a company to oversee the project and site selection for key network hubs. The planning group has reportedly begun contacting authorities in a number of provinces to discuss the project. The first round of investment in the network will total RMB 100 bln.

As planned, the network will have roughly eight core network hubs, with some other major network hubs to connect with network hubs in multiple cities. Current and prospective future network builders will be required to accept the condition that they continue to invest in the network for a period of five to eight years without any expectation of a return on investment.

Keywords: Jack Ma e-commerce Internet logistics Alibaba Group

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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