Cainiao Network said Wednesday it’s leading a group that will invest $1.5 billion to build a logistics center at Hong Kong International Airport.
Alibaba Group’s logistics arm will lead the project via its joint venture with China National Aviation Corp. (Group) Ltd. and YTO Express. The companies hold respective 51%, 35% and 14% stakes in the JV.
The state-of-the-art digital logistics center at the world’s busiest cargo airport will have an estimated gross floor area of 380,000 square meters. It will include an air-cargo processing center, a sorting center and order-fulfillment center. It will feature automated warehousing technology and automated temperature control. It should be able to handle tens of millions of packages a year and bring an additional 1.7 million tons of cargo per year to the Hong Kong airport when fully operational, supporting burgeoning activity by small and medium-sized companies involved in e-commerce, Cainiao said. The center is slated to go online in 2023.
It’s not the first handling center for Cainiao in Hong Kong, a key entrepot for goods entering and leaving China. It already has three global fulfillment centers operated by its partners in Hong Kong. Cainiao also opened an airfreight route between Hong Kong and Belgium last month, the second international route set up for e-commerce parcels after opening one between Hangzhou and Moscow earlier this year.
Wednesday’s announcement follows a spate of news from Cainiao last week and reflects its broader efforts to expand and strengthen its global logistics network. Cainiao unveiled plans to open five hubs around the world, in Dubai, Hangzhou, Kuala Lumpur, Liège in Belgium and Moscow. All told, Cainiao has committed to invest over RMB 100 billion to build out a smart logistics network that drives 24-hour delivery inside China and 72 hours to and from the rest of the world.
Alibaba Executive Chairman Jack Ma reiterated those delivery aspirations last week, along with ambitious predictions for the number of daily packages that will be routed through Cainiao’s logistics network in the years to come. The number now is about 100 million, and Ma says the time isn’t far off when it will rise to 1 billion a day.
“The Hong Kong hub will be yet another milestone on our way to achieving our goal of 72-hour global delivery, and will further empower SMEs locally and globally to more readily tap the benefits of more inclusive globalization through cross-border e-commerce,” said Wan Lin, president of Cainiao Network. “As an important gateway for global goods to enter the mainland China market and vice versa, Hong Kong is of strategic importance to Cainiao, and we have a strong commitment to help the city address the surging needs of the future.”