Cainiao Smart Logistics Network has entered into a public-private partnership with the Hainan government to support the province's development as a global smart supply chain pilot zone.

Cainiao’s chief executive Lin Wan and Hainan Provincial Bureau of International Economic Development director Shengjian Han jointly announced the partnership at Global Smart Logistics Summit 2021 (pictured).

The companies said the partnership is “an important first step in contributing to the success of the free trade port”.

Cainiao, which is the logistics arm of Alibaba Group Holding, said it will work with Hainan to provide smart logistics and technology services to global merchants in order to establish Hainan as “a trade center and pilot model for the digital economy”.

The partnership includes four key areas:

1) Establishment of smart logistics infrastructure on Hainan’s main and outlying islands to attract duty-free merchants.

Cainiao will develop customised warehouses for luxury goods, pharma goods, fragrances and cold chain products to establish Hainan as “a duty-free haven”. The companies said the goal is to leverage the customs clearance system, as well as  smart logistics innovation, to attract more than 1,000 duty-free merchants. There is a special focus on merchants who have yet to enter the Chinese market, to bring imported goods, new product launches and exclusive items into Hainan.

“This will allow consumers in Hainan to access goods from around the world,” the companies said.

2) Launch of Hainan free trade port merchant smart service center.

Cainiao will commit technological resources and expertise to develop a smart service platform comprising of a logistics and supply chain management system, digitised customs platform, and the store and delivery point management system. Cainiao said the smart service platform will enable the digitalisation of operations in Hainan and improve merchants’ operational efficiency.

“This means that customers will take less than 70 seconds to complete their pick-up at the designated location, a 50% increase in efficiency compared to before. This solves the issue of long waiting lines and improves customer experience,” the company said.

3) The upgrading of Hainan’s global freight network.

Cainiao will actively participate in Hainan's international air cargo terminal operations. It will continue to drive the expansion of its global freight network to include direct chartered flights to countries such as Japan, South Korea and Europe, seafreight routes between Hong Kong and Hainan, and the launch of more channels to export goods to The Greater Bay Area (GBA). The plan is to expand to over 800 international cargo flights by end 2021.

4) Development of Hainan’s global supply chain center.

Cainiao will capitalise on its supply chain operations and experience to scale up the logistics infrastructure in key areas to form a seamless logistics chain. For example, its processing center in Hainan support the assembly and packaging of products, which can then be directly distributed to consumers.

Hainan, China’s largest Special Economic Zone, is a key port on the modern Maritime Silk Road in China’s Belt and Road Initiative.

On June 1, 2020, Chinese authorities released the Master Plan for the Construction of Hainan Free Trade Port to transform the entire island province into a free trade port (FTP).

This news follows Cainiao’s announcement in April 2021 where it launched seven weekly direct chartered flights linking Singapore and Hainan. These flights have enabled goods to be shipped from Singapore to Hainan’s duty-free stores within 15 hours, compared with the traditional shipping model that could take three or more days.

Last month, a more detailed plan was announced for the establishment of full-suite digitalised logistics services tailored for Hainan — including the development of smart and bonded warehouses with total floorspace spanning 150,000 sqm within three years — and the launch of Cainiao’s first digitised logistics system to expedite logistics processes.

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