The one thing that you love about marketplaces like Amazon and Alibaba is its ability to help you get what you need, in a time bound manner. It’s what separates the bigwigs itself – faster and timely deliveries is one of the primary things most customers look forward to, apart from a fluid UI and a choice of more products. Focusing on logistics is perhaps what a successful online business is a today, especially when it comes to a marketplace like Alibaba.
Alibaba’s planning: What it Wants to Do Differently
Jack Ma has always come up with new and more efficient ways to make his Online marketplace Alibaba even better. He thinks it’s not only the quality and availability of products which is important but also to deliver the product to the customer when he needs it.
Logistics contribute around 10-15 per cent in the country’s GDP in a developed country and figure goes down to 5 per cent in developing countries.
Cainiao Network, the logistics wing of the Alibaba group, is reportedly going to invest a tremendous amount of 20 Billion U.S dollars. They target to deliver the product across the world in 3 days and same delivery in China.
Alibaba currently holds less than 50 per cent shares in Cainiao which makes them incapable of the loss-making affiliate. After the investment, Alibaba will have a more significant influence on the operation of Cainiao.
Step for the future:
In the near future, Jack Ma also plans to use the logistics data collected over many years in the development of a faster delivery service. Information like products people from a particular city prefer to order in a specific time of the year will in future determine the upshift or downshift of logistics concerned.
Increasing competition and disagreement in policies between E-commerce sites and delivery service providers is a significant cause of loss in Online marketing. With his more flexible policy and vision, Jack Ma is trying to solve the issue.
The plan is not to blindly increase the infrastructure to meet the demands of the future but to use the data to develop a system where the existing infrastructure can operate at maximum efficiency. Currently, the transportation charge exceeds 5% bringing down the profit to the company.
Jack Ma believes the current services are capable of delivering 140 million products to the customers in a day in China. And the number will go even higher if we include the overseas deliveries. This is a great figure for today but in future, the deliveries per day in China itself will cross a Billion mark.
Alibaba’s cross-border delivery has been challenged many times by foreign good exchange services in the U.S. Improving ties with the courier services of the native country is also a part of the plan. They recently opened a headquarter in Melbourne and new tie-ups with New Zealand SMEs for improving cross transportation across both the countries.
“This network is not only national but global. This is what we will work closely with our partners to achieve and bring benefits to all,” said Ma at Global Smart Logistics Summit.
Jack Ma also emphasised on integrating all the different logistics services be it in any part of the world in a single web.