Cainiao Network (Cainiao), the logistics arm of Alibaba Group, has announced the launch of its first distribution center and trucking line haul route in South Korea to enhance cross-border delivery services between China and South Korea for its e-commerce platform, AliExpress.

In a statement, Cainiao said South Korean customers of AliExpress could receive their parcels from Mainland China in three working days, or an average of five working days.

Last-mile delivery expansion

"In the near term, Cainiao plans to further expand its last-mile delivery network by adding on more local courier partners and establish a comprehensive nationwide logistics network, beyond the capital city of Seoul," the Chinese logistics company said.

Meanwhile, Cainiao's 1500-square meter distribution center located within an hour's drive from Seoul is located near the local customs clearance checkpoint.

Cainiao said it is equipped with innovative smart technologies, such as automatic assembly lines, and a smart distribution setup that can support high volume small parcel sortation.

These will reduce operating costs by 10% and save more than 12 hours in processing and handling time for cross-border deliveries.

To accelerate delivery time, Cainiao has also established a trucking line haul route with a daily capacity of 1 ton that is connected to the distribution center.

It said once packages are sorted and packed, they can be brought directly to the nearest courier station to be dispatched via last-mile delivery.

"The launch of this distribution center and trucking line haul route is another key milestone for Cainiao's business in South Korea, where we witnessed a 50% increase in sales volume over the past year," said Shawn Louis, executive general manager for Cainiao Global.

"The localized logistics network, along with a cost-effective logistics solution, will enable cross-border merchants to continue meeting consumer demands."

Booming South Korean e-commerce market

Cainiao noted that there were more than 5 million cross-border parcels delivered daily in the last quarter of 2021, prompting this investment in logistics technology and localization strategy to boost its overseas infrastructural facilities.

South Korea accounts for 2.5% of the global e-commerce market in 2021, ranking 5th after the world’s largest consumer markets such as China, US, and the UK.

Its e-commerce revenue is expected to show an annual growth rate of 3.90% from 2022 to 2025, indicating the increasing prevalence of online shopping.

To meet these expectations, Cainiao noted that brands will look for more efficient services that are able to fulfill their logistics needs.

Last year, Cainiao launched a sea freight route between China and South Korea, with chartered ships operating six times a week.