Cainiao Launches New Routes for Large-Item Shipping

By DaDa

01 Buying a Dragon Boat Like Buying a Jar of Lao Gan Ma

In recent years, with the rise of dragon boat racing, boatyards' business has gradually moved from offline to online. Orders have been steadily increasing since the Spring Festival, and recently an overseas Chinese in Australia wanted to order a dragon boat before the Dragon Boat Festival, specifying that it be shipped to Darling Harbour in Sydney. The dragon boat is 14 m long and worth 30,000 yuan. Sending a dragon boat abroad requires customs declaration, so how could it be delivered safely and on time to Darling Harbour?

On April 18, Cainiao Logistics, under Alibaba Group, launched ocean shipping services in Australia, allowing cross-border large items to be shipped to Australia by sea. For this landmark personal cross-border large-item order, the dragon boat received great attention from Ningbo Beilun Customs, and the relevant person in charge said at the customs clearance site: "We fully support Tmall going global and assist enterprises in accelerating customs clearance." In the end, with coordinated efforts from all parties, the dragon boat completed a 15-day journey and was successfully transported from Qiandao Lake to Darling Harbour in Sydney, 10,000 km away. This event delighted Ms. Wang, who placed the dragon boat order, and also caused quite a stir in the Australian Chinese community.

Some people sighed: "Export policies are becoming more and more convenient, allowing overseas Chinese to buy a dragon boat just like buying a bottle of Lao Gan Ma. This is the convenience brought by e-commerce, something unimaginable before."

With the rapid rise of China's cross-border e-commerce, express delivery services have also rapidly expanded overseas, and the bottleneck restricting the development of cross-border e-commerce, namely the transport of large items, is gradually being broken.

Cui Jiehui, co-founder of Linshi Wood, told reporters that last year the retail sales of goods his company sold overseas through the Tmall platform exceeded 20 million yuan. Local Chinese in Australia are used to frequently changing residences, replacing furniture once every two years on average, and have relatively high price tolerance. For Chinese furniture and home furnishing companies like Linshi Wood that offer good quality at low prices, this is a market with enormous potential. Cui Jiehui said that opening directly operated stores overseas, dealer franchising, and OEM agency all three traditional models are not very suitable for Linshi Wood. Linshi Wood's greatest advantage is achieving low-cost expansion through e-commerce platforms, and the key to this lies in whether express delivery is strong enough.

It is reported that the large-item logistics service newly launched in Australia is the fourth dedicated ocean shipping line for small and medium-sized enterprise e-commerce opened by Cainiao Logistics, in addition to Singapore, Malaysia and other places. At present, Cainiao Logistics' ocean shipping service in Australia can support large items popular with Australians, such as beds, sofas, treadmills and cat trees, to be sent directly from China to local addresses. At this point, facing several of the world's most important Chinese markets, domestic small and medium-sized enterprises producing large items such as furniture and home furnishings, major home appliances and outdoor equipment have gained a new route to go global, saving at least one third of logistics costs, while shipping time has been shortened from as long as a month to about fifteen days, bringing Taobao products into a new era of cross-border large-item transport. "From charter flights for small parcels to Europe, to cross-sea routes for large items in the Asia-Pacific region, plus more than 100 cross-border warehouses and hundreds of dedicated routes around the world, Cainiao has already built a three-dimensional 'sea, land and air' logistics network globally, providing small and medium-sized enterprises with a complete set of infrastructure for going global," said Guan Xiaodong, general manager of Cainiao International. "In the future, Cainiao will also accelerate the goal of 72-hour global delivery, providing Chinese enterprises with an even more ultimate logistics experience as they go global."

In the layout of the "last mile," Cainiao has also set up nearly 200 pickup points in Australia. Consumers can freely and flexibly choose the time and place to receive their packages, and can also save more than half of the transshipment costs.

02 Cainiao Opens Ocean Shipping Routes for Large Items, Logistics Costs for SMEs Going Global Plunge by One Third

Solving Logistics Problems Stimulates Tenfold Sales

In June 2017, Tmall launched the "Tmall Going Global" project, one of whose most important tasks was to lead 1.2 billion domestic goods abroad, and Linshi Wood, which started from e-commerce, was one of them. Cui Jiehui, co-founder of Linshi Wood, told reporters that last year the retail sales of goods his company sold overseas through the Tmall platform exceeded 20 million yuan. Local Chinese in Australia are used to frequently changing residences, replacing furniture once every two years on average, and have relatively high price tolerance. For Chinese furniture and home furnishing companies like Linshi Wood that offer good quality at low prices, this is a market with enormous potential. Cui Jiehui said that opening directly operated stores overseas, dealer franchising, and OEM agency all three traditional models are not very suitable for Linshi Wood. Linshi Wood's greatest advantage is achieving low-cost expansion through e-commerce platforms, and the key to this lies in whether express delivery is strong enough. When Linshi Wood first entered overseas markets, because large items could not be shipped by air, overseas orders could only be sent after placement to cities such as Shenzhen and Guangzhou, and then declared through intermediaries before ocean shipping. It usually took a month to complete delivery, and consumers also had to go to the seaport in person to pick up the goods. Moreover, because multiple links required the involvement of intermediaries, consumers also paid more additional fees. Taking sofas as an example, an ordinary sofa priced at more than 1,000 yuan required nearly 2,000 yuan in shipping to Malaysia, even exceeding the value of the product itself. High logistics costs also affected merchants' rapid expansion, but fortunately this did not last long. Soon afterward, Cainiao intervened in Linshi Wood's overseas transport process and provided a complete supply chain management solution. Now, when Linshi Wood receives overseas orders, it only needs to send them to the consolidation warehouse in Shenzhen, and then Cainiao uniformly provides logistics distribution and customs declaration services. It takes only 7-10 days for products to be delivered to consumers in Southeast Asia, and there is no need to go to the port in person for pickup. "Shipping costs are now reduced by about one third," said Pang Xiqing, e-commerce head of Linshi Wood. "After shipping costs came down, it also stimulated our sales performance in turn. From the launch of Tmall Going Global to today, our export sales have increased nearly tenfold."

Building Logistics Channels Is the Biggest Key for SMEs Going Global

For China's small and medium-sized enterprises, the areas along the "Maritime Silk Road" in the "Belt and Road" have already become important new markets. According to a report by Temasek and Google, by 2025, Southeast Asia's internet economy is expected to grow to 200 billion USD, with growth driven mainly by e-commerce, online advertising and online gaming, and leisure tourism, especially e-commerce, whose average annual growth rate will reach 32%. In the Australian market where Cainiao has newly added ocean shipping services, local Chinese are used to frequently changing residences, replacing furniture once every two years on average, and have relatively high price tolerance. For affordable and high-quality Chinese furniture and home furnishings, this is a market with enormous potential. To take a big slice of this new market, logistics is the most critical infrastructure. "For example, even for logistics details that Chinese consumers take for granted, Southeast Asian consumers could only obtain all node information after Cainiao launched ocean shipping services." Pang Xiqing introduced, "Before that, all our customer service time was spent answering the question 'where is my stuff?'" At present, Cainiao has provided various types of enterprises with comprehensive "sea, land and air" solutions including charter flights, ocean shipping and China-Europe freight trains. Along the Maritime Silk Road, Cainiao already has more than 20 logistics warehouses, and last year it even established its first eWTP super logistics hub in Malaysia, bringing China's smart logistics solutions overseas. Zhang Yong, CEO of Alibaba Group and chairman of Cainiao Network, said that under the trend of new retail, Cainiao will accelerate the opening of new logistics tracks. Against this background, Cainiao has established two major development directions, new retail and globalization, and is accelerating the provision of new logistics services for small and medium-sized enterprises around the world.