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At its annual Global Smart Logistics Summit, Alibaba’s logistics arm, Cainiao unveiled its ‘smart’ system to manage logistics facilities at scale.

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Alibaba, along with its logistics affiliate, Cainiao Network, has agreed to invest US$1.38bn in ZTO, a leading express delivery company in China.

Nationwide logistics network

ZTO is one of China’s largest express delivery businesses, incorporating pickup and last-mile solutions, as well as value-added logistics services. Its delivery network covers over 96% of China’s cities and counties and already works in partnership with Alibaba, as well as rival online giant, JD.com.

Investing to integrate online and offline

Under the new US$1.38bn deal, Alibaba and Cainiao have agreed to acquire 10% of the business. In the partnership, Cainiao and ZTO will work together to promote the seamless integration between online and offline commerce. It will also further strengthen the two businesses’ focus on improving delivery capabilities, warehouse management, cross-border logistics and technology-driven smart solutions.

Strengthening synergies

Daniel Zhang, CEO of Alibaba Group and Chairman of Cainiao Network, commented:  "ZTO has been an important partner to Alibaba Group and Cainiao Network in the development of the new digital economy. The continuing expansion of New Retail is catalysing new opportunities and demands in logistics. This strategic investment will strengthen synergies across our mutual businesses to create new value and improved experience for merchants and consumers."

Alibaba has launched a blockchain-based food tracing system with several Australian and New Zealand businesses.

End to end traceability

New Zealand businesses Fonterra and New Zealand Post, and Australian businesses Blackmores and Australia Post are the first to be involved in Alibaba’s Food Trust Framework, Alibaba’s blockchain-based food tracing system.

According to the businesses involved, the system will use an immutable central ledger to achieve “end-to-end supply-chain traceability and transparency to enhance consumer confidence and build a trusted environment for cross-border trade”.

Food Trust Framework

The Food Trust Framework will be incorporated into Alibaba’s Tmall marketplace to better detect fake ingredients. In the event of contamination, the blockchain technology will enable businesses to retrace the supply chain and identify the specific batch, instead of recalling multiple shipments.

A reaction to increasingly complex supply chains

Alibaba Group’s General Manager of Tmall Import & Export, Alvin Liu commented that food fraud is a significant challenge, particularly with increasingly complex supply chains: “In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both end consumers and merchants.”

Alibaba Group has announced plans to invest in Huitongda Network Co, an ecommerce retailer that specialises in distribution to rural areas.

200m rural customers

Huitongda is a subsidiary of household appliance and consumer electronics online retailer, Jiangsu Five Star Appliances. With 200 million rural customers in 15,800 townships and villages in 18 Chinese provinces, it offers financial services, supply chain management and sales online and through 80,000 franchised stores in rural areas.

Boosting existing logistics expertise

Alibaba already owns Rural Tabao, which offers rural shoppers the same selection of goods and services as those in urban areas. The two businesses will work together to improve logistics, supply chain and technology availability in rural areas in order to develop infrastructure sustainably.

Investing in logistics for the future

Just last week, Alibaba announced a $9.6bn investment in Ele.me, a food delivery platform in China. It follows the retailer’s increasing investment into its logistics operations: last year, it increased its investment in its logistics affiliate, Cainiao, and stated that it intended to invest $15bn in logistics over the next five years.

13 November, London

With the theme of SUPPLY CHAINS FOR GROWTH, the interactive programme will allow you to create a day that will give you everything you need to enhance your food and grocery supply chain.

Presentations

14/06/2018
Explore how visual technology is powering engagement and efficiency across the end to end supply chain
19/02/2018
Alibaba Group is the world's largest online marketplace. In this two-slide snapshot, we've included an essential summary of supply chain priorities, latest network developments and other key statistics for the retailer.

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A practical one day workshop for all roles in suppliers, to help develop your understanding of the vital part that supply chains play in underpinning FMCG businesses.