Alibaba’s Cainiao Network Partners With BEST Inc. to Launch Cross-Border E-Commerce Logistics Service Between Malaysia and China

Cainiao Smart Logistics Network announced a partnership with BEST Inc. on Wednesday to launch an end-to-end logistics service between Malaysia and China to shorten delivery time for cross-border e-commerce parcels.

Cainiao has an existing established network in Malaysia. Prior to this announcement, Cainiao worked with only one company for air freight service and also offered a full end-to-end sea freight service. The latest announcement is part of its expansion initiative to aggregate more partners onto the platform to service the Malaysia-China logistics route, with BEST Inc. as the lead partner.

The China-Malaysian cross-border logistics service launched by BEST and Cainiao integrates all-link resources, including domestic cargo collection, international trunk line transportation, customs clearance, overseas warehousing, and terminal distribution. 

“The current partnerships will improve our delivery efficiency, where the cross border sea shipping duration will be reduced to as fast as 6 days after leaving the port in China,” according to the two companies. “There on, customers will receive their parcels as soon as the next day after customs clearance in Malaysia.”

The end-to-end delivery efficiency from China to Malaysia has improved by up to 25%, from the previous 20 days to 15-18 days, Cainiao said. 

Cainiao said it will also leverage its technological capabilities to digitalize last-mile logistics. Each parcel will be tagged with an electronic shipping label to facilitate the ease of real-time tracking from the point of overseas dispatch to final local delivery.

“The establishment of a direct Malaysia-China e-commerce logistics service is continued affirmation of our investment into the region,” said James Zhao, the general manager of Cainiao Network. 

Following the launch of Alibaba’s first overseas electronic World Trade Program (eWTP) hub in Kuala Lumpur in 2017, this initiative will “go towards supporting SMEs that are looking to engage in cross-border trade,” Zhao said.  

“With a direct logistics service, Malaysian SMEs can look forward to selling goods to China via the Malaysian Pavilion on, while consumers in Malaysia will benefit from a better customer experience when buying from Chinese merchants,” Zhao said. 

In recent years, Malaysia has been vigorously promoting the development of e-commerce. In 2016, the local government released the “National E-commerce Strategic Roadmap”, aiming to guide small and medium-sized enterprises to have more access to e-commerce, build a first-class terminal delivery network and turn Malaysia into a regional e-logistics center.

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With increased technology adoption and internet penetration, the Malaysian e-commerce sector is predicted to grow about 30% in 2020, according to open information platform OpenGovAsia. This growth has been accelerated by the pandemic and subsequent enforcement of the Movement Control Order (MCO) in March which increased consumers’ adoption of online shopping and the growth of adjacent e-commerce logistics services.

“Southeast Asia has been a key focus area of BEST’s global strategy,” said Johnny Chou, Chairman and CEO of BEST Inc., an integrated smart supply chain and logistics solutions provider. 

Through investment in automation, information technology and logistics networks, Chou said they have already developed express delivery networks in five markets in the region, while facilitating the growth of local SMEs and cross-border e-commerce.

Currently, BEST’s logistics network in Malaysia comprises over 100 last-mile service stations, with plans to operate 270 stations and seven sortation centers in the next three years. 

In the first half of 2020, BEST delivered a total of 25 million parcels in Southeast Asia. During the recent 9.9 sale event, BEST’s parcel deliveries tripled in East Malaysia and this is expected to increase significantly during the upcoming Double 11 shopping festival.