mid term project introduction about the logistics activities of alibaba in china

ALIBABA GROUP AND THE CHINA SMART LOGISTICS MODEL 1.. Alibaba''''s Logistics activities with the China Smart Logistics model 2.1.. b Cainiao''''s role Cainiao''''s cross-border logistics solution

UNIVERSITY OF ECONOMICS AND LAW FACULTY OF INTERNATIONAL ECONOMICS

Mid-term Project

INTRODUCTION ABOUT THE LOGISTICS

ACTIVITIES OF ALIBABA IN CHINA

Subject: Logistics Instructor guides: M.S Nguyen Duy Quang Authors: Group 2

TP.HCM, Sth August, 2024

TEAM MEMBERS

Truong Thi Kiéu Giang K224022SN0004 | Members

OVERVIEW

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ALIBABA GROUP AND THE CHINA SMART LOGISTICS MODEL

1 Overview of Alibaba Group and Alibaba's e-commerce activities

1.1 History of formation and development of Alibaba e-commerce group

- In 1999, Alibaba with the slogan "Global Trade starts here." is an e-commerce and online auction group founded by Jack Ma, headquartered in Hangzhou, Zhejiang, China The Alibaba.com website was established and became a portal connecting Chinese manufacturing enterprises with foreign buyers

- In 2003, Alibaba launched the Taobao service, allowing users to sell their own items online

- In 2008, Tmall - a service selling famous items to Chinese users was born

- In 2010, the Aliexpress freight service was opened to serve international users, marking Alibaba's step into the international market

- From 2010 onwards, Alibaba.com began to expand its business globally by allowing foreign businesses to exploit and use like Chinese businesses Alibaba's Chinese website is chinese.alibaba.com focusing on the Chinese domestic B2B market and www.taobao.com_is a C2C e-commerce site for Chinese individual customers

- Currently, Alibaba has representative offices in more than 70 cities across China, India, Japan, Korea, America, Europe For 4 consecutive years the company received the "Best of the Web" award : B2B” voted by Forbes magazine The company was also voted the most popular B2B e-commerce website by Far Eastern Economic Review readers Alibaba is now ranked 23rd

on the list of companies with the world's largest market capitalization (Forbes information)

Alibaba.com is the first and last destination for import-export companies looking for business opportunities and promoting their business online The Alibaba website allows users to find information and business guidance through categories in more than 27 industries and more than 1,300 product types from apparel to electronics

Owning 3 main e-commerce sites (Taobao, Tmall and Alibaba.com), Alibaba not only dominates the e-commerce field in China, but is also on the way to attack the world of Internet finance and computing cloud and logistics

1.2 Business culture

Alibaba organizes and operates an ecosystem where all participants from consumers, merchants, third-party service providers and others have the opportunity to grow Alibaba's success and rapid growth are built on entrepreneurship, innovation, and an unwavering focus on meeting customer needs

Alibaba believes that a strong sense of shared values allows Alibaba to maintain a common corporate and community culture, no matter as big as the company's growth 1.3 Alibaba's core values

Customer First

Teamwork Embrace Change

¬-.- Integrity -

Passion Commitment

s Customers come first

This reflects Alibaba's choice of what's important in order of priority Only by creating sustainable customer value can employees thrive and shareholders achieve long-term benefits

¢ Teamwork

Alibaba believes that teamwork and teamwork enable ordinary people to achieve extraordinary things

¢ Embrace change

In this rapidly changing world, companies must be flexible, creative and willing to adapt to new business conditions to survive

¢ Integrity and uprightness

Alibaba expects its employees to maintain the highest standards of honesty and meet their commitments

¢ Passion

Alibaba expects its employees to approach everything with their enthusiasm and never give up doing what they believe is right

¢ Commit

Employees who demonstrate their perseverance and excellence will be praised Alibaba always encourages employees to “work happily and live seriously”

1.4, Long-term development vision and goals

Alibaba wants to build the future infrastructure for commerce Alibaba envisions that the company's customers will be met, worked and lived with Alibaba Alibaba believes that its operations will last at least 102 years

The corporation's culture, business model and systems are built to last, so they can achieve long-term sustainability Alibaba's ultimate goal is to create value for society and help find solutions to society's challenges Alibaba wants to transform Alibaba's resources into fuel for small and medium-sized enterprises, which in turn will support the progress of the entire society

Alibaba enables hundreds of millions of commercial and social interactions between the company's users, between consumers and merchants, and between businesses every day Alibaba empowers its customers to build businesses and create value that can be shared among participants in the company's ecosystem

Alibaba continues to expand its business from commerce to cloud computing, digital media and entertainment, among other areas Alibaba has evolved into a unique, dynamic ecosystem and creative The company has set mid-term goals for fiscal 2024: continue to expand its globalization efforts, serving more than | billion consumers through its consumer business in China; FY 2036: serving 2 billion global consumers, enabling 10 million profitable businesses, and creating 100 million jobs

1.5 Organizational structure:

In the early years, Alibaba operated as a multi-industry corporation, including many subsidiaries operating in different fields such as e-commerce, online payment, cloud computing, logistics Each subsidiary has its own organizational structure but is still under the general management of the parent corporation

After that, Alibaba went through many restructurings, especially in 2023 Alibaba conducted a major surgery, splitting into 6 independent business divisions Each division can call for outside capital and list shares (IPO)

- 6 main departments after restructuring:

e Cloud Intelligence Group: Focuses on cloud operations and artificial intelligence

® Taobao Tmall Commerce Group: Includes online shopping platforms Taobao and Tmall

e@ Local Services Group: Includes Ele.me food delivery service and maps

@ Cainiao Smart Logistics: Specializes in Alibaba's logistics services

@ Global Digital Commerce Group: Includes international e-commerce businesses such as AliExpress and Lazada

e Digital Media & Entertainment Group: Includes film and streaming segments Alibaba's new organizational structure has created a flexible and dynamic working environment, where each department can freely explore and exploit new business opportunities The separation into independent units not only helps Alibaba adapt quickly to market changes but also creates conditions for each department to develop

in depth and become a leading business unit in the field mine At the same time, the ability to independently raise capital will help Alibaba access abundant capital to invest in innovative projects and promote growth

2 Alibaba's Logistics activities with the China Smart Logistics model

2.1 Overview of Cainiao Smart Logistics (China Smart Logistics)

| a) Introducing Cainiao_

Cainiao Network Technology Co., Ltd (referred to as "Cainiao") was founded by Alibaba Group and a series of other Logistics companies in 2013

Cainiao provides a logistics information platform, connecting Logistics service providers, warehouses and distribution centers to optimize the operational efficiency

of China's Logistics industry

Cainiao's goal is to make deliveries anywhere in China within 24 hours and globally within 72 hours

b) Cainiao's role

Cainiao's cross-border logistics solutions are primarily focused on serving merchants

on the Alibaba marketplace, including AliExpress and Taobao International, where products are shipped overseas from China and the platform domestic Tmall Global, on which overseas products ship to China

Through big data technology, Cainiao also helps Alibaba expand its e-commerce network across China's rural areas and vast population Cainiao's position as a logistics ecosystem powered by data and collaboration makes Cainiao a solution to improve the efficiency of China's logistics network, bringing benefits to domestic and global merchants and consumers alike

2.2 Logistics activities of Cainiao Smart Logistics

a) Electronic Order Processing Process (e-Fulfillment)

e Buyers want to place an order, they need to see the expected delivery time (Delivery time prediction) Based on the seller and buyer database, Alibaba can estimate the time it takes for goods to be shipped from the seller to the buyer's address

e Buyer chooses delivery method: Home delivery (Door to door service) or self- pickup at Self-service Pick-up Points

e When the order is approved by the system, the seller chooses a delivery partner

to complete the order Both sellers and buyers can track orders from processing

to delivery

e@ The forwarding company picks up the goods from the seller and is stored at the distribution center Detailed information about the order is updated into the

freight forwarding company's transportation management system, which transfers real-time data to CSL

The entire logistics information platform that Alibaba owns is responsible for comnecting the corporation's transaction system with the freight forwarding company's transportation management system and the seller's order processing system

Sellers can evaluate or refer to the delivery service quality of the forwarding company based on service criteria, customer satisfaction levels and complaints through Alibaba's information system

Once the order information (processed) is updated into the system, the delivery company will take over and process this information Meanwhile, both sellers and buyers can continue to track their orders online (in real time) using their computer or mobile device until they arrive

After receiving the goods, the buyer can rate the delivery service These reviews will

be saved so that other sellers and buyers can see and consider when using this delivery unit These reviews also help delivery companies improve their services

b) Cainiao's delivery network and distribution warehouse

* Delivery

Cainiao's smart routing and sorting service has helped reduce companies’ delivery errors by 40%

- Delivery platform: Cooperating with the top 15 delivery companies in China, including SF Express, Shentong Express, YTO Express, ZTO Express and Yunda, Cainiao has established a 4 average processing data platform, 2 million packages per day, accounting for 70% of all deliveries in China

- Delivery operations: By providing partner companies with real-time route analysis based on the location of distribution centers, travel routes and expected order volumes Besides, Cainiao also provides weather forecast information for users to know the weather conditions in Chinese highways, cities and provinces This data allows logistics companies to optimize warehouse operations, transportation and human resources to meet customer needs

In addition, to optimize the delivery process: 2 software used by Cainiao in its freight forwarding process are Vehicle-Cargo Matching and Route Planning

Vehicle-Cargo Matching: This software will create a 3D picture for the most reasonable arrangement of goods on the vehicle

Route Planning: With 50 million goods per day and a large number of freight vehicles, there will be countless different ways to transport goods Therefore, Route Planning is used to find the most efficient and least time-consuming delivery route for Cainiao drivers

Route Optiruzat« iC argo Layout

Pic 1: Cainiao's delivery network and distribution warehouse

¢ Distribution warehouse

Distribution system: Alibaba takes advantage of the nationwide network of distribution centers of logistics partners, and Cainiao also invests in building a number of additional distribution centers considered based on many factors such as: population numbers, per capita income, e-commerce usage rate and existing logistics infrastructure Currently, China Smart Logistics' warehouse network has more than 1,800 large and small distribution centers, of which the largest is the 1.37 million square meter center in Tianjin This center has been supporting 42 stations delivering goods within the same day or the next day to residents of major cities such as Beijing, Tianjin or Hebei

Operational process : After receiving a product order, the seller will proceed

to select a logistics and shipping partner Shipping staff of selected logistics companies will go to the seller's location to pick up the goods Goods will be gathered at shipping stations, then moved to larger distribution centers Cainiao's smart warehouse has robots called AGVs (Automated Guided Vehicles) This entire AGVS system operates smoothly thanks to the direction

of Al Cargo boxes will be labeled with separate barcodes that will be classified