CHINA. Cainiao Smart Logistics Network, the logistics arm of Alibaba Group Holding Limited, has entered a strategic partnership with the Hainan government to support the development of the Hainan global smart supply chain pilot zone – an important first step in contributing to the success of the Hainan Free Trade Port.

The alliance was jointly announced at Cainiao’s just-completed annual Global Smart Logistics Summit 2021 by Cainiao CEO Lin Wan and Hainan Provincial Bureau of International Economic Development (Hainan IEDB) Director Shengjian Han.

The smart service platform… means that customers will take less than 70 seconds to complete their pick-up at the designated location, a 50% increase in efficiency compared to before

This news comes hot on the heels of Cainiao’s respective announcements around the launch of seven weekly direct chartered flights linking Singapore and Hainan to support import and export merchants in the free trade zone, and a detailed plan to establish a full-suite of digitalised logistics services tailored for Hainan.

Hainan Provincial Bureau of International Economic Development Director Shengjian Han (left) and Cainiao CEO Lin Wan share the tsage at the Global Smart Logistics Summit 2021 to announce the landmark agreement

Hainan, China’s largest Special Economic Zone, is a key port along the 21st Century Maritime Silk Road within China’s Belt and Road Initiative.

In June last year, the Chinese authorities released the Master Plan for the Construction of Hainan Free Trade Port to transform the entire island province into a free trade port.

As part of the partnership, Cainiao will be leveraging its global logistics capabilities and technology to establish Hainan as a trade centre and pilot model for the digital economy. Cainiao will be working closely with the Hainan authorities to provide holistic smart logistics services to merchants from around the world.

The public-private partnership includes four key areas:

Establishment of a comprehensive smart logistics infrastructure on Hainan’s main and outlying islands to attract duty free merchants

Cainiao will be developing customised central warehouses tailored for luxury goods, pharmaceutical products, fragrances and cold chain products to establish Hainan as a duty free haven. The goal is to leverage the highly efficient customs clearance system and smart logistics innovation to attract over 1,000 duty free merchants, especially those that have yet to enter the China market, to bring imported goods, new product launches and exclusive items into Hainan. This will allow consumers in Hainan to access goods from around the world.

Launch of Hainan Free Trade Port merchant smart service centre

Cainiao will be committing technological resources and expertise to develop a smart service platform comprising logistics and supply chain management system, digitised customs platform, and the store and delivery point management system.

The establishment of the smart service platform will enable the digitalisation of operations in Hainan, linking key elements across the entire value chain to bring about significant improvements in merchants’ operational efficiency. This means that customers will take less than 70 seconds to complete their pick-up at the designated location, a 50% increase in efficiency compared to before. This solves the issue of long waiting lines and improves customer experience.

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The upgrading of Hainan’s global freight network

Cainiao will be actively participating in the Hainan international air cargo terminal operations and continue to drive the expansion of the global freight network to include direct chartered flights to countries such as Japan, South Korea and Europe, sea freight routes between Hong Kong and Hainan, and the launch of more channels to export goods to The Greater Bay Area. The plan is to expand to over 800 international cargo flights by the end of 2021.

Development of Hainan’s global supply chain centre

Cainiao will be capitalising on its supply chain operations and development experience to rapidly scale up the logistics infrastructure in key areas to form a seamless logistics system. For example, Cainiao’s processing center in Hainan can support the assembly and packaging of products which can then be directly distributed to consumers.

Footnote: Every fortnight The Moodie Davitt Report publishes Hainan Curated, in association with Foreo, a selection of all recent stories from the offshore duty free sector in Hainan province.

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