Alibaba: 100-Billion Investment on New Logistical Network

According to a local newspaper agency, the Alibaba Group has recently decided to invest the first CNY100 billion ($16.08 billion) into a project with a few industrial partners to build a new logistics network, which will be capable of overnight products delivery across China in eight to ten years.¹ Alibaba runs the biggest e-commerce platform in China, which recorded an unprecedented single-day revenue of CNY19.1 billion ($3 billion) on November 11, 2012.

The rational behind this huge investment is that Alibaba believes that logistics is the bottleneck that stands in the way of the booming e-commerce in China. Another e-commerce giant, Jingdong Mall has already started working on its own smart logistics system back in 2007.

Recent years have witnessed a competition in logistics system between e-commerce giants in China. It may be true that logistics is the bottleneck of the expanding e-commerce industry. However, most questions for those e-commerce giants are not about the projects, but go to the timing. Is it too early to all in?

[1]. http://www.supplychaindigital.com/global_logistics/china-retail-giant-spearheads-new-logistics-network