Alibaba Group’s logistics division, Cainiao Network, has announced it is to establish a smart warehouse network in Southeast Asia, which will cover a total land area close to 2,500,000m2, across Vietnam, Indonesia, Malaysia and Singapore.
The network will comprise Cainiao Hubs, also known as cHubs, and be strategically located near key transportation nodes and manufacturing hubs in the region to tap into the regional ecosystem’s connectivity to global markets. Cainiao’s smart warehouse business model encompasses five key pillars, including a domestic warehouse network to provide storage services; domestic logistics parks to support local logistics partners with their distribution needs; domestic integrated smart industrial parks that also serve as financial, cloud and intelligent hubs; overseas eHubs under the eWTP initiative; and finally, overseas cHubs to support local businesses.
E-commerce in Southeast Asia has expanded almost six times between 2016 and 2020 and is set to grow at a rate of 22% annually, to US$309bn by 2025, according to Statista. According to McKinsey’s Global Manufacturing and Supply Chain Pulse Survey published in June 2020, 45% of survey respondents were confident that the sector in Southeast Asia would recover in two to three months, while 53% were confident that recovery would come within a year.
Cainiao’s network is intended to capitalize on the region’s rapid growth in e-commerce and the rising expectations of a direct-to-consumer model. Cainiao also hopes to put cHubs in a prime position to establish an innovative supply chain infrastructure while supporting local B2B and B2C businesses in their local distribution, supply chain and export needs. The network’s full-chain service will include fulfillment and sorting for local deliveries, import and export for B2B and B2C businesses, smart supply chain management, and smart logistics technology such as IoT, automation and warehouse management systems (WMS). Niche logistics requirements are also factored in, including cold chain management and green logistics.
Eric Xu, general manager of Cainiao Smart Hub, said, “It has always been Alibaba’s core mission to make it easy to do business anywhere. The Southeast Asia smart warehouse network was launched to accomplish exactly that. With this move, Cainiao is solidifying our commitment to help shape the logistics industry in Southeast Asia. We believe this can further bolster cross-border trade and e-commerce growth for this region. Furthermore, strong export markets will be able to benefit from Cainiao’s supply chain management services which will drive export demand.”