Alibaba and China Life Insurance to invest $1.24 billion in “smart logistics”

Investment fund will be used to grow the nationwide logistics network to support the e-commerce boom

Alibaba and China Life Insurance to invest $1.24 billion in “smart logistics”

Insurance News

By Gabriel Olano

China’s largest insurer China Life Insurance and Cainiao Network, Alibaba’s logistics arm, have forged an alliance to create a RMB8.5 billion (US$1.24 billion) fund to invest in the expansion of the latter’s network of “smart” handling and storage facilities.

According to the firms, the fund will help Cainiao, which will continue to manage the assets and facilities, to keep up with the skyrocketing delivery volumes. Earlier this year, Alibaba chairman Jack Ma predicted that deliveries would grow 10 times to reach one billion each day in the next decade.

Cainiao was founded in 2013 by Alibaba and several mainland Chinese logistics firms. It does not employ delivery drivers, instead operating via a logistics information sharing platform, connecting a network of independent providers, warehouses, and distribution facilities.

“Big data and algorisms sit at the heart of providing advanced delivery solutions, such as an optimised delivery routes,” Lu Zhenwang, head of Shanghai-based Wanqing Consultancy, told South China Morning Post.

“But to truly bring the game to the next level, Cainiao also needs infrastructure, such as logistic parks, warehousing and fulfilment centres, to further increase efficiency and lower costs for its partners.”

Last month, Cainiao announced that it added one million smart logistics vehicles to beef up its courier network. The vehicles, manufactured with the help of SAIC Motor Corp and Dongfeng Motor Corp, will utilise Cainiao’s big data and algorithms to find the optimum delivery route.

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