Cainiao Network, the logistics arm of Alibaba Group Holding Limited, has announced its financial results for the quarter ended 31 December 2022.
In the quarter ended December 31, 2022, revenue from Cainiao, before inter-segment elimination, grew 17% year-over-year to RMB23,023 million (US$3,338 million).
Revenue from Cainiao, after inter-segment elimination, grew 27% year-over-year to RMB16,553 million (US$2,400 million), primarily contributed by the increase in revenue from domestic consumer logistics services as a result of service model upgrade since late 2021 to enhance customer experience and international fulfillment solution services.
Cainiao has continued its emphasis on the development of global logistics infrastructure with the expansion of overseas distribution centers to 15, as well as the establishment of overseas warehouses, and self-operated distribution and pick-up facilities.
In Latin America, Cainiao has deepened its local logistics network by diversifying capabilities and resources in areas such as eHubs, line-haul, sorting centers, and last-mile networks among others. Currently, Cainiao operates eight China-Brazil chartered flights per week, launched its distribution center in Sau Paolo, and runs a local delivery network that covers a majority of Brazil.
In Europe, Cainiao has launched its distribution center in Poland and embarked on logistics infrastructure development in Northeast Europe. Most recently, it has partnered with DHL to jointly invest in the establishment of the largest last-mile logistics network in Poland.
To deliver superior service, Cainiao has identified doorstep delivery as one of the key initiatives to improve customer experience. During the 11.11 Global Shopping Festival period, peak daily doorstep deliveries exceeded 18 million, including those delivered directly to the door or through Cainiao Post. The emphasis on doorstep deliveries has set an industry benchmark and serves as a key differentiator in the Chinese courier industry.
This quarter, Cainiao has integrated its warehousing and distribution to improve supply chain efficiencies for Alibaba’s eCommerce business and its broader merchant base.
Cainiao has also provided tailored supply chain solutions to mitigate industry-specific pain points, especially during peak seasons such as the Double 11 Shopping Festival. For example, it introduced and expanded doorstep deliveries with free assembly services, reducing delivery time for large, bulky goods by up to three days across 70 Chinese cities.
To address the challenge of surging demand during sale season for beauty brands, Cainiao offered country-wide deliveries via multiple domestic warehouses to increase overall delivery timeliness by 10%. For fragile goods in industries such as food and beverage, Cainiao has reduced breakages and damages through self-operated deliveries to safeguard service quality.
Embedding sustainability initiatives into core business capabilities
To amplify sustainability efforts, Cainiao has entered into strategic partnerships with FMCG companies to jointly develop smart green supply chains. In November, Cainiao has also entered a strategic partnership with Nestlé to boost its Direct-to-Consumer (DTC) business in China, and jointly established China’s first automated DTC fulfillment center, improving warehouse operation efficiency by three times as compared to the traditional model.
As part of its ESG initiatives, Cainiao expanded its recycling campaign across more than 130,000 Cainiao Post stations during the Double 11 Shopping Festival 2022. In the area of emergency logistics, Cainiao has also actively invested in the development of specialized capabilities and sent millions of oximeters and tens of thousands of oxygen generators to rural areas across the country to help improve rural medical and healthcare conditions.