Alibaba’s (NYSE:BABA) logistics subsidiary, Cainiao, has announced the introduction of a “consolidated shipping” service in the United States, enhancing its global logistics offerings. This cross-border service bundles multiple orders from various Chinese e-commerce platforms, utilizing air and sea transport routes to deliver to U.S. customers within as little as five days.
The consolidated orders are centralized in a warehouse before being dispatched from China. This strategic move is anticipated to gain significant traction among Chinese consumers residing in the United States.
Cainiao is poised to garner momentum from various Chinese e-commerce entities, broadening its influence in the logistics sector. Alibaba’s expanding cross-border logistics services, beyond the recent U.S. launch, also include consolidated shipping for Chinese shoppers in overseas markets like Hong Kong, Singapore, and Australia.
Furthermore, the company has introduced Cainiao Express, a new express delivery service, aiming to provide doorstep deliveries within half-day, same-day, and next-day timelines. This service expansion goes beyond the previously available options exclusively for select Alibaba-owned businesses.
In addition to these developments, Alibaba is reportedly pursuing a $57 million bid to acquire Best, a Chinese logistics company with a robust presence in Southeast Asia. These initiatives are expected to reinforce Alibaba’s Cainiao Smart Logistics Network business unit, which achieved RMB 22.8 billion ($3.1 billion) in sales in the second quarter of fiscal 2024, reflecting a year-over-year growth of 25%.
In conclusion, Alibaba’s growing logistics portfolio positions the company to capitalize on opportunities in the global logistics market. According to a report by Allied Market Research, the global logistics market is projected to reach $16.79 trillion by 2032, indicating a Compound Annual Growth Rate (CAGR) of 5.6% between 2023 and 2032.
This expansion aligns with Alibaba’s strategic goals, contributing to the company’s overall financial performance. The Zacks Consensus Estimate for Alibaba’s fiscal 2024 revenues is $133.01 billion, reflecting a 5.52% year-over-year growth. The estimated earnings per share stand at $9.12, indicating a 14.86% year-over-year growth.
Furthermore, Alibaba’s U.S. expansion positions it competitively against industry players like Amazon, which has been actively strengthening its logistics presence. Amazon, through services like Amazon Shipping and “Supply Chain by Amazon,” continues to enhance its logistics capabilities for domestic and international shipments.
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf 
