Cainiao, the logistics service operated by Alibaba, is launching two automated distribution centers in Karachi and Lahore as its first entry into Pakistan, it announced on Friday.
Alibaba’s overseas expansion has manifested in a mix of investment and integration over the past decade. In 2018, the e-commerce titan bought Pakistan’s e-commerce platform Daraz for an undisclosed amount. It controls the online shopping service Lazada, which is neck to neck with Shopee in Southeast Asia, and owns a stake in Turkey’s Trendyol as well as Indonesia’s Tokopedia.
Founded in 2012, Daraz was born out of the internet venture builder Rocket Internet like its sibling Lazada. It delivers to Pakistan, Bangladesh, Sri Lanka, Nepal, Myanmar and other countries in the region. Daraz declined to disclose how many active users it has, only saying it has “served a potential user base of 500 million people” and grew 85% in gross merchandise volume (rough metric for sales in e-commerce) over the last two years.
The smart distribution centers will come with a suite of Cainiao’s in-house tech like electric control units, software-based programmable logic controllers (PLC is critical for warehouse automation but traditionally is hardware-powered, Caniao told TechCrunch) and a computing solution that promises to combine the capabilities of cloud and the speedy runtime on the edge.
The suite of warehousing solutions, said Cainiao, could reduce manual labor by half and increase human productivity by 100%.
Given Alibaba’s far-reaching footstep worldwide, it won’t be surprising to see Cainiao following the parent into more countries. Cainiao already operates nine large overseas distribution centers across Europe, Asia and the Americas and has plans to ramp up operations in Southeast Asia, South Asia and Europe, the company’s vice president of technology Ding Hongwei said in a statement.
Integrating Cainiao into Alibaba’s sprawling e-commerce portfolio indeed looks to be the plan.
“Logistic network development is a priority in our globalization strategy as logistics is the fundamental infrastructure supporting a high-quality consumer experience based on integrated product supply from cross-border and locally,” Daniel Zhang, CEO of Alibaba, said on the firm’s December earnings call.
“Cainiao has been developing logistic network in Southeast Asia and Europe, leveraging the commerce use cases presented by Lazada, AliExpress, and the Trendyol.”
AliExpress is Alibaba’s cross-border e-commerce platform that mostly connects Chinese sellers to global consumers.