Cainiao Network, the logistics arm of Alibaba Group, announced on 23rd March the launch of its first distribution center and trucking line haul route in South Korea to enhance cross-border delivery services for its e-commerce platform, AliExpress. This launch will enable South Korean customers to receive their overseas parcels in as fast as three working days. In the near term, Cainiao plans to further expand its last mile delivery network by adding on more local courier partners and establish a comprehensive nation-wide logistics network, beyond the capital city of Seoul.
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South Korea accounted for 2.5 percent of the global eCommerce market in 2021, ranking 5th after the world’s largest consumer markets such as China, US, and UK. According to Statista, its eCommerce revenue is expected to show an annual growth rate of 3.90 percent from 2022 to 2025, indicating the increasing prevalence of online shopping. This rising popularity of online shopping is expected to be accompanied by consumers’ demand for better, faster, and more affordable delivery services. To meet these expectations, brands will also look for more efficient services that are able to fulfill their logistics needs.
With this new 1500-square meter distribution center and trucking line haul route that has a daily capacity of one ton, Cainiao aims to provide South Korean consumers with better cross-border delivery services for a more enjoyable online shopping experience. South Korean customers can look forward to receiving their parcels from Mainland China in as fast as three working days, or an average of five working days.
Cainiao’s new distribution center is equipped with smart technologies, such as automatic assembly lines, and smart distribution set-up which can support high volume small parcel sortation, amongst other smart logistics facilities. These will reduce operating costs by 10 percent and save more than 12 hours in processing and handling time for cross-border deliveries.
To accelerate delivery time, Cainiao has also established a trucking line haul route that is connected to the distribution center. Once packages are sorted and packed, they can be brought directly to the nearest courier station to be dispatched via last mile delivery.
“The launch of this distribution center and trucking line haul route is another key milestone for Cainiao’s business in South Korea, where we witnessed a 50 percent increase in sales volume over the past year. The localised logistics network, along with a cost-effective logistics solution, will enable cross-border merchants to continue meeting consumer demands and improve their overall shopping experience,” said Shawn Louis, Executive General Manager for Cainiao Global.
With more than five million cross-border parcels delivered daily in the last quarter of 2021, Cainiao is investing in logistics technology and a localization strategy to reinforce overseas infrastructural facilities that can further safeguard the timeliness and cost-effectiveness of the value chain.
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In the near term, Cainiao plans to further expand its last mile delivery network by adding on more local courier partners and establish a comprehensive nation-wide logistics network, beyond the capital city of Seoul.