Alibaba International Station Logistics Helps Alibaba's Development

Alibaba International Station Logistics Helps Alibaba's Development

 

 

On July 2, 2025, Cainiao Global Supply Chain announced a comprehensive upgrade of its overseas warehouses in the Asia Pacific region, with over 20 warehouses covering 10 core countries and regions including Singapore, Malaysia, and Thailand. The fulfillment rate of outbound orders on the same day was 99.9%.

 

It cannot be denied that cross-border e-commerce has become the trend, and as a logistics enterprise, Cainiao does need to layout overseas warehousing. However, the rookie's increased globalization this time may not only be due to its own strategic positioning, but also a response to Alibaba's overall strategic needs.

 

In February 2025, Alibaba will fully acquire the remaining shares held by minority shareholders of Cainiao and implement a full exit plan for employees' Cainiao equity incentives. In response, Alibaba Chairman Joseph Tsai stated, "Considering the strategic importance of Cainiao to Alibaba and the significant long-term opportunity to build a global logistics network, we believe that now is the appropriate time for Alibaba to increase its investment in Cainiao

 

In recent years, due to economic pressure and the disappearance of mobile Internet traffic dividends, Ali has stopped expanding blindly and focused on its core e-commerce business. In this context, the rookie of "returning" naturally needs to cooperate with Alibaba's strategic planning to "play auxiliary".

1, Born for Alibaba's e-commerce business,

 

Cainiao's positioning has undergone several adjustments

 

Just as most of Alibaba's business originates from the extension of the e-commerce ecosystem, the birth of Cainiao is also to break through the "bottlenecks" in the e-commerce business.

 

In 2012, the transaction volume of Alibaba's "Double Eleven" shopping festival reached 19.1 billion yuan, a year-on-year increase of 260%, with a peak daily package volume exceeding 72 million. Although the "Double Eleven" event achieved impressive results, Alibaba faced severe challenges such as order backlog and express delivery backlog due to the immature logistics infrastructure at that time.

 

In order to improve the fulfillment capability of logistics, in May 2013, Alibaba joined forces with logistics companies such as SF Express, YTO Express, and ZTO Express to establish the "China Intelligent Logistics Backbone Network" project called "Cainiao Network". The initial investment is 100 billion yuan, and the plan is to establish an intelligent logistics backbone network that can support an average daily retail sales of 30 billion yuan within 8-10 years.

 

At that time, in order to ensure that traditional logistics companies could cooperate with the "Cainiao Network" with peace of mind, Jack Ma, who was then the chairman of Alibaba's board of directors, solemnly promised, "With this network, we will not seize the business of express delivery companies. Alibaba will never do express delivery because we do not have this ability. We believe that there are many express delivery companies in China that can do better than us

 

In fact, at its inception, Cainiao only wanted to be a light asset data collaboration platform. By integrating transaction, order, and express data from Tmall and Taobao, Cainiao is able to build a logistics data platform. On this basis, Cainiao can further empower traditional logistics enterprises with digital capabilities to improve the turnover speed of express delivery.

 

However, as Alibaba dominates the Chinese e-commerce industry and its business tentacles extend in various directions like octopus, the positioning of Cainiao has quietly changed.

 

In September 2017, Alibaba announced that in order to further promote its new retail strategy, it would invest 100 billion yuan over the next five years to advance the construction of core areas such as intelligent warehouses, intelligent distribution, and global super logistics hubs, helping Cainiao accelerate the construction of a globally leading logistics network. From then on, Cainiao gradually shed its "light asset" background and became an internet logistics technology platform with certain front-end capabilities.

 

Due to Alibaba's massive traffic and the gradual improvement of its logistics network, Cainiao has shown strong growth potential. Official data shows that from fiscal year 2021 to fiscal year 2023, Cainiao's revenue was 52.733 billion yuan, 66.867 billion yuan, and 77.8 billion yuan respectively, with a compound annual growth rate of 21.4%.

 

Due to becoming a dominant logistics company, Alibaba even hopes that Cainiao will enter the capital market. In September 2023, Alibaba announced its intention to spin off its shares of Cainiao and list them independently on the Hong Kong Stock Exchange.

 

However, it should be noted that from birth to growth, every step of Cainiao is closely related to Alibaba. As Alibaba adjusts its strategic planning, Cainiao is also struggling to continue its previous development pace.

2, Alibaba returns to users,

 

Rookie becomes "supporting role" again

 

As is well known, in recent years, due to the narrowing of the e-commerce market dividend, e-commerce giants such as Alibaba and JD.com have followed Pinduoduo's lead in opening up growth space and offering extremely low prices. However, due to the extremely low prices disrupting the e-commerce ecosystem and suppressing consumers' shopping enthusiasm, e-commerce platforms have not opened up growth opportunities.

 

In this context, Alibaba began to reflect on its overall strategic planning and embarked on a "journey of return". According to LatePost, in May 2023, Jack Ma held a small-scale communication meeting with various business leaders of Taobao Group. At the meeting, Ma Yun said that Taotian Group needs to "return to Taobao, return to users and return to the Internet". Subsequently, Taobao weakened its extreme low price strategy.

 

In sync with the return to its main e-commerce business, Alibaba has also begun to shrink its non core businesses. For example, since 2024, Alibaba has successively cleared physical retail businesses such as Intime Department Store and Gaoxin Retail. Although Cainiao has close ties with e-commerce business and will not be abandoned by Alibaba, it also needs to adjust its development direction accordingly.

 

In March 2024, Cainiao withdrew its IPO application from the Hong Kong Stock Exchange. Regarding this, Tsai Chung hsin stated, "Our primary goal is very clear - to win in the e-commerce field, we need to restore market share and drive business growth. We hope to view the group's e-commerce and logistics businesses as an organic whole, in order to better control cost structure, pricing, sales, and user experience, thereby enhancing our competitiveness

In order to support Alibaba's breakthrough in the e-commerce field, Cainiao's business model has undergone tremendous changes. In January 2025, 36Kr reported that Cainiao had completed a round of organizational restructuring, transferring its e-commerce platform related businesses to platforms such as Taobao and AliExpress, while retaining only logistics operations and service functions. After adjustment, Cainiao has become a company focused on logistics business.

 

 

In fact, in recent years, Cainiao has indeed been closely cooperating with Alibaba's main e-commerce business. For example, in April 2024, Taobao offered the "unlimited free shipping" benefit for after-sales returns to 88VIP users. The service provider of this right is Cainiao Wrap, a subsidiary of Cainiao.

 

Due to solving the worries of returns and exchanges, Taobao has captured a large number of high net worth users. Official data shows that on Double Eleven in 2024, the number of orders placed by Taobao 88VIP members increased by over 50% year-on-year, and 88VIP members maintained double-digit growth. In 2025, during the 618 shopping festival, the number of Taobao 88VIP members exceeded 50 million, setting a new historical high.

 

In view of the fact that rookie has fully focused on logistics business and become the "supporting role" of Alibaba e-commerce system, its development direction will obviously be more closely adjusted around the overall strategy of Alibaba e-commerce in the future.

 

3, Alibaba accelerates globalization,

 

Cainiao is deeply mired in losses

 

Due to the disappearance of the dividends of China's e-commerce industry, Alibaba has shifted its focus to overseas markets in recent years, attempting to open up imaginative space through cross-border e-commerce.

 

According to data disclosed by the Statistical Analysis Department of the General Administration of Customs, in 2024, China's cross-border e-commerce imports and exports reached 2.63 trillion yuan, a year-on-year increase of 10.8%. In the past five years, the scale of cross-border e-commerce trade in China has grown more than 10 times.

 

Despite the surge in cross-border e-commerce dividends, Alibaba is facing significant competitive pressure. In 2022, Pinduoduo will launch its cross-border e-commerce platform Temu to overseas markets, providing a massive amount of low-priced products through large-scale procurement from Chinese manufacturers, eliminating intermediaries, and platform subsidies.

 

Due to Temu's scale advantage in building a deep low-cost moat, if Alibaba wants to break through in overseas markets, it cannot help but find differentiated competitiveness beyond price.

 

As is well known, besides price, another major "competition point" in the e-commerce industry is the ability to fulfill contracts. For example, although JD.com may not be able to provide a massive amount of extremely low-priced products like Pinduoduo, it can firmly lock in a group of efficiency seeking users with its 211 limited time delivery.

 

 

Due to its extensive experience in overseas markets, Cainiao possesses outstanding global logistics capabilities. According to official information, Cainiao's global supply chain currently operates over 40 overseas warehouses in 18 countries and regions including Europe, North America, and Asia Pacific, providing omnichannel, end-to-end supply chain management solutions and warehouse distribution operations services for domestic and foreign brands and merchants.

In this context, Alibaba naturally hopes to fully tap into Cainiao's differentiated competitive advantages and strengthen the end of line fulfillment capabilities of cross-border e-commerce businesses such as AliExpress, International Station, and Lazada.

 

From this perspective, the recent announcement by Cainiao Global Supply Chain to comprehensively upgrade its overseas warehouses in the Asia Pacific region is a concrete manifestation of the above strategy. In response, the Asia Pacific regional head of Cainiao Global Supply Chain stated, "We integrate dispersed logistics nodes into a responsive and agile collaborative network through digital technology, helping customers leverage larger markets with lighter inventory

 

However, it should be noted that as the "supporting role" of Alibaba's e-commerce business, it is unable to make its own development plan according to its own interests, and newcomers entering the "deepwater area" of globalization are also facing huge cost pressure.

 

 

According to the prospectus, Cainiao's gross profit margins for the fiscal years 2021-2023 were 10.5%, 10.7%, and 10.5%, respectively. Due to abnormally high operating costs, Cainiao's net profits were -2.015 billion yuan, -2.286 billion yuan, and -2.801 billion yuan respectively, with a total loss of 7.102 billion yuan.

 

What makes rookies even more anxious is that Alibaba's cross-border e-commerce business has its own development pace. For example, in September 2024, AliExpress allows merchants to operate independently in POP mode and flexibly choose their shipping methods. In this context, it is difficult for rookies to easily achieve economies of scale and turn losses into profits. According to the financial report, in Q1 2025, Cainiao's revenue was 21.573 billion yuan, a year-on-year decrease of 12%; Adjusted EBITA loss is RMB 606 million.

 

In summary, looking back at the development history of Cainiao over the past decade, it is not difficult to see that the genes deeply rooted in Alibaba's e-commerce system determine that it is difficult for it to grow independently according to the logic of an independent logistics enterprise.

 

Recently, with Alibaba refocusing on its main e-commerce business, Cainiao has once again returned to its "auxiliary role" to provide support for Alibaba's e-commerce. Due to its core responsibility of serving Alibaba's e-commerce strategy, Cainiao is not only struggling to escape the dilemma of continuous losses, but its own development space and imagination are also constantly narrowing.