Alibaba Group Holding Ltd To Launch Logistics Service In South Korea

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Chinese online retail behemoth Alibaba announced Wednesday that it would launch its logistics service in South Korea this year. The Hangzhou-based e-commerce giant’s logistics arm Cainiao Network is carrying out a mid- and long-term logistics program in South Korea, reports China’s state-run Xinhua. Alibaba said it was analyzing relevant data.

Alibaba rubbishes reports of launching the service next month

Alibaba will cooperate with domestic and overseas logistics partners and try to utilize their facilities. However, the company rubbished reports that the service will be launched next month. Alibaba said that time frame was “too fast.” Once Cainiao begins its service in South Korea, Chinese consumers will be able to purchase goods directly from South Korean sellers via Tmall, make payments through Alipay and get their goods delivered by Cainiao Network.

Thanks to the cross-border e-commerce boom, Chinese consumers have increasingly been purchasing from foreign sellers. Affluent and middle-class Chinese buyers have lost faith in local goods due to a series of safety scandals and poor quality. According to Joongang Daily, South Korea accounted for only 1% of China’s $1 trillion cross-border e-commerce.

Alibaba agreed to boost cooperation with South Korea

Last August, Alibaba founder Jack Ma met with South Korean President Park Geun-hye, and the two agreed to boost e-commerce cooperation. Many of South Korea’s supermarket chains, online retailers and TV shopping platforms have set up shops on Alibaba’s Tmall. Alipay offers cross-border payment services to more than 400 South Korean enterprises.

In January, South Korean media reported that Alibaba was in talks with the city of Incheon to jointly invest $920 million to set-up ‘Alibaba Town’ in Incheon. The town would reportedly be built in the city’s free economic zone. Spread over one million square meters, it would have a logistics center, a hotel, a shopping mall, facilities for cultural events, and restaurants.

Alibaba shares rose 1.44% to $85.81 at 9:38 AM EDT on Thursday. The stock has declined more than 18% this year so far.

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