Zhejiang Cainiao Supply Chain Management Co., a Chinese logistic network operator, has received investments from several strategic investors, including Singapore-based GIC Private Limited and Temasek Holdings Private Limited, Malaysia’s Khazanah Nasional Berhad and China-based Primavera Capital Group.
This is the first time Cainiao has raised money, the company says. Cainiao declines to reveal the deal’s size, however Chinese investment data Company Iheima estimated total investment in this round could top $1.5 billion. Alibaba Group holdings Ltd. and several carriers jointly created Cainiao in 2013, aiming to build an open platform for fast delivery.
“Logistics is a key infrastructure of business and will be the engine for China’s economic growth in the next 10 years. Our mission is to provide an open and resources-sharing logistics platform to improve efficiencies for merchants, shipping companies and consumers,” Tong Wenhong, president of Cainiao, says in a statement.
Cainiao’s mission is to deliver anywhere in China within 24 hours and anywhere within the world in three days.
Cainiao created a standard digital shipping bill so shipping companies can save time on input and exchanging shipping information. It also helps shippers to plan shipping routes before getting the parcels from senders. Cainiao says it helped shipping companies increase fulfillment efficiency 30% from pervious practices. Carrier companies on Cainiao shipped 250 million parcels within 7 days in 2014 Singles’ Day (Nov. 11), while in 2015 they took only 1.5 days to ship the same amount of parcels.
Now 60% of parcels shipped through Cainiao use a digital shipping bill, the company says.
Cainiao recently launched an app named Guoguo, which means parcels in Chinese. The app makes allows the shipping companies and consumers to exchange information more easily. Using this app, delivery staff could take returns or receive sending parcels from nearby consumers while they are out delivering. Online consumers can also rate the delivery service via Guoguo, and Cainiao says those reviews can help shipping companies find and fix operating problems faster.
About 70% of parcels in China run on Cainiao’s network, which processes 600 million pieces of shipping information per day among 128 warehouses, 40,000 service locations and 1.7 million delivery workers.
Cainiao provides same-day delivery in 20 Chinese cities and second-day delivery in 150 cities. The company also operates 49 overseas warehouses and can process up to 4 million cross-border parcels per day.
In large Chinese cities, Cainiao helps consumers get everything from fresh foods to large appliances within two-hours of placing an order.