Cainiao, the logistics unit of Chinese e-commerce giant Alibaba is preparing to go global for the biggest online shopping event of the year, “11.11” which falls on Nov. 11. In preparation for an influx of orders from international customers Cainiao says it positioned 1,000 ocean containers full of goods in international markets and will charter a total of 51 flights related to 11.11 orders.
Apart from the long-distance transportation arrangements, Cainiao has spent much of the past year investing in physical infrastructure and new technologies aimed at improving delivery efficiency and boosting fulfillment capacity. The company has expanded its bonded warehouse footprint by 80 percent to more than 1 million square meters. Bonded warehouses are used to forward stock consolidations of imported goods so that items are in the country of destination when an online order is placed, to store goods as close as possible to customers and reduce delivery times.
Cainiao’s “Sky Eye Program,” for instance, taps the cameras in logistics stations to “help delivery firms identify idle resources and abnormalities in the logistics process” and send status updates in real time to constantly optimize operations. It also has an army of 700 automated guided vehicles (AGVs) in its new IoT Future Park warehouse in Wuxi, Jiangsu, which are designed to drive, load and unload parcels, making fulfillment a 50 percent faster process.
The event, once known as “Single’s Day,” started out as a humorous rebuff of Valentine’s Day but has transformed into an e-commerce holiday even bigger than the Western world’s post-Thanksgiving “Black Friday” event. To put the size of it into perspective, the logistics network handled 812 million 11.11 orders last year.
Ben Wang, vice president of Cainiao, said Alibaba’s ultimate goal is to forego the digital vs. physical dichotomy of modern retail, and instead create a “New Retail” environment that combines both online and offline attributes to work in tandem. “Cainiao is the logistics backbone of Alibaba’s New Retail strategy,” Wang said. “We are providing an online and offline, cross-platform supply chain solution to merchants and enabling them to cut inventory costs, while increasing operating efficiency, especially around 11.11 – the busiest season of the year.”
Growth of the event has been staggering. Just five years ago, parcel orders during 11.11 surpassed 100 million for the first time – a feat that took nine days to accomplish. “Last year, it took less than three days to deliver the same number of parcels,” Wang said. “Consumers increasingly want faster, better delivery, so that’s what we’re doing. This year, we’re striving to achieve a new high, leveraging the beauty of scale and technology.”