The business of the e-commerce platform is transferred to Taotian, and Cainiao truly becomes a logistics company. | Exclusive from 36Kr.

Written by Peng Qian

Edited by Qiao Qian and Yang Xuan

36Kr exclusively learned that Cainiao Group will complete a round of organizational structure adjustment in the near future.

After the adjustment, Cainiao is more in line with its own "industrial positioning" and truly becomes a logistics company, focusing on logistics operations.

Specifically, the biggest change is that the more than 400-person team in Cainiao's original international business that served AliExpress has been transferred to the newly integrated Alibaba E-commerce Business Group. Ding Hongwei, the Cainiao executive in charge of this business, will directly report to Jiang Fan, the CEO of Taotian Group and International Business Group. Since last year, he has begun to report to Wan Lin and Jiang Fan simultaneously.

In addition, the two teams of domestic e-commerce supply chain solutions and electronic waybills will also be handed over to the Taotian Group.

"In a nutshell, the businesses related to the e-commerce platform are handed over to the 'front desks' such as Taotian and AliExpress, while the logistics operation and service functions remain in Cainiao," an employee of Cainiao analyzed to 36Kr.

In other words, what is handed over is the "E-commerce Logistics Department" that formulates logistics plans and is closely related to the e-commerce business, while the logistics services of Taotian's self-operated businesses such as Tmall Supermarket and Tmall Global, as well as most of the warehousing and logistics services of the cross-border e-commerce platform AliExpress, are still provided by Cainiao.

As 36Kr understands, this shift of Cainiao actually began last year. Over the past year or more, Cainiao and Alibaba E-commerce have been maintaining close cooperation in business. Not only has a dedicated team been established to serve AliExpress, but the teams of both sides have also been working jointly in the International Business Park; Cainiao Guoguo also provides support for services such as "free return shipping" of the Taotian Group; and the delivery services for the overseas large-scale clothing of Taobao with free shipping are also undertaken by Cainiao.

Now, making the e-commerce businesses belong to the e-commerce and the logistics businesses belong to the logistics makes the rights and responsibilities more distinct and is also more in line with the positioning stated in Cainiao's prospectus in September 2023 - "We have developed from a technology platform into an intelligent logistics network with end-to-end capabilities".

"The bosses of the front desk (e-commerce) are very concerned about the improvement of the consumer experience. Strengthening integration can further enhance the competitiveness of e-commerce," a middle-level employee of Cainiao told 36Kr.

As a business that has been established for 11 years, Cainiao currently has three positions: globalization, industrialization, and digitalization, corresponding to the three main businesses of global express delivery (AliExpress, non-Alibaba external orders, "4PX" and other holding businesses), global supply chain, and global technology business.

It is not difficult to trace the historical context of Cainiao. In the past, Cainiao was a technology platform, and its earliest product was the electronic waybill. It was not until 2019 that it began to invest heavily in infrastructure to build a global logistics network. A person close to Cainiao said: "This is because Cainiao realizes that it must carry out the practical operation of logistics landing in order to form its own barriers, including distribution, cooperation with warehousing companies (holding 4PX), and self-built warehousing."

Returning to the positioning of a logistics company can also treat Alibaba and external order customers with a more consistent standard. The market has always believed that the proportion of Alibaba-related businesses in Cainiao's business is too high, considering it not neutral and open enough. However, as 36Kr previously learned, Cainiao increased its investment in external orders last year and began to undertake some businesses of cross-border e-commerce companies such as Temu. According to Cainiao's current positioning, Cainiao has an underlying logistics network, and this network can be accessed by any company in need. At the same time, its cooperation model with AliExpress is also more market-oriented.

Besides "industrialization", the continuous organizational adjustments of Cainiao over the past year or more, "globalization" is another important thread.

As 36Kr understands, Cainiao conducted a round of structural adjustment in September last year. According to the new structure at that time, Cainiao will form a global structure that combines horizontal and vertical aspects. The horizontal aspects include the China Region, Asia-Pacific Region, Americas Region, Europe Region, and Middle East and Africa Region, while the vertical aspects include global supply chain, global express delivery, and global logistics technology. "If Cainiao wants to truly achieve globalization, the middle and back office must be globalized. Only in this way can the business move forward more quickly," Wan Lin said internally at that time.

For Cainiao, the overseas market is indeed a new blue ocean and has become its biggest growth driver. According to the financial reports of 2024 Q1 and Q2, Cainiao's revenue growth rates reached 30% and 16% respectively, ranking second among all sub-groups, second only to International Business, and its growth is mainly contributed by the international logistics business. Since the 2023 fiscal year (that is, from Q1 2021 to Q1 2022), the revenue growth rate of Cainiao's international logistics business has continuously surpassed the domestic business. Now, the international business accounts for more than 50% of Cainiao's revenue, making it the largest source of income.

Now, Cainiao, which has transformed into a logistics company, has a clearer business goal: on the one hand, it expands more external order customers, and it began to access the non-self-operated platform of JD.com at the end of October last year; on the other hand, it goes global with all its strength, vigorously develops cross-border orders, attracts more brands and platforms to join the cooperation, and expands the local-to-local business. Currently, Cainiao still has the largest number of cross-border packages in the world, and relying on the overseas local logistics network, Cainiao can provide a local express product of "2 euros next-day delivery" in European countries, and in other pan-European countries, it can provide a "3-5 euros 3-day delivery" logistics service.

As early as the establishment of Cainiao, Alibaba founder Jack Ma had the expectation of "building a global intelligent logistics network" for it. Now, this positioning has not completely changed, but it can be more focused.