Alibaba creates joint-venture in logistics for China e-retailing

Chinese e-retailing giant Alibaba is continuing its onslaught into logistics through the creation of a joint-venture with the Chinese white goods manufacturer Haier.

In a press statement on Tuesday (December 9, 2013) the two companies said that  “Alibaba Group will invest a total of HK$2.822bn into Haier Electronics Group Co. Ltd”.

This is an investment vehicle of the wider Haier Group that is quoted on the Hong Kong stock market. In turn both companies will invest in ‘Goodaymart Logistics’ which is effectively an in-house logistics provider for the Haier Group, making it a joint venture.

Goodaymart will be developed to handle not only Haier products, but it appears will also handle traffic from Alibaba’s business. Tmall is both a ‘consumer-to-consumer’ (c2c) and a ‘business-to-consumer’ (b2c) business.

Goodaymart logistics is grouped together with the Goodaymart retailing business and already operates “nine shipping bases nationwide, 90 logistics delivery centres and more than 2m sq m in warehouse space. ….also established logistics and distribution sites in more than 2,800 counties across China and operates more than 17,000 service points”.

The wider objective is to develop a logistics infrastructure capable of supporting Alibaba’s internet retailing ambitions but also a wider retail logistics capability. The two companies described their plans as to provide “fast and convenient end-to-end e-commerce and logistics experience for consumers. Using the newly established Goodaymart joint venture company, the parties will establish industry logistics service standards for point-to-point delivery of large-sized goods and create a nationwide logistics and service network for the delivery and assembly of household appliances and large-sized goods. At the same time, Haier Group and Alibaba Group will jointly develop and provide innovative supply chain management solutions and products to drive the development of the Chinese logistics industry.”

Alibaba has previously announced its intention to invest in physical logistics assets across China, driven by its frustration with the poor quality of provision in many areas of the country.