Alibaba to capitalize on Hainan duty-free shopping boom

HANGZHOU, China — A boom in duty-free shopping on Hainan Island since the pandemic has convinced Alibaba Group Holding to upgrade its logistics network there, Chairman Daniel Zhang said Thursday.

With Chinese largely unable or unwilling to travel overseas to shop, Beijing last year widened an exemption to allow domestic travelers to buy up to 100,000 yuan ($15,645) of goods duty-free on the South China Sea island each year, up from 30,000 yuan.

Hainan’s duty-free sales consequently doubled last year to 27.4 billion yuan. The figure is projected to reach 60 billion yuan this year en route to 100 billion yuan in 2022.

Zhang, also Alibaba’s chief executive, did not quantify how much the group’s Cainiao Smart Logistics Network unit will invest in Hainan, but said it would develop a smart logistics service platform to integrate customs clearance and supply chain management and build central warehouses for luxury products, fragrances, pharmaceuticals and refrigerated goods.

Cainiao would also work with local authorities to expand air and sea freight links with Hong Kong, Japan, South Korea and Europe. The company this week launched a chartered cargo flight, to operate five days a week, between Singapore and Haikou, Hainan’s capital.

Based at Alibaba’s headquarters in the eastern city of Hangzhou, Cainiao handles an average 5 million parcels daily from two main domestic warehouses and ones overseas in Belgium, Malaysia, Thailand and the United Arab Emirates.

Speaking at the Global Smart Logistics Summit in Hangzhou, Zhang noted that the COVID-19 pandemic has accelerated the digitalization of the logistics industry, fueled by online shopping and demand for swift delivery.

“I no longer need to [promote] the word e-commerce anymore,” said Zhang, clad in black jeans. “Virtually all businesses have adopted e-commerce, and all consumption has become digitalized, bringing tremendous opportunities for the development of logistics networks.”

Cainiao was Alibaba’s fastest growing identified business segment in the year ended March 31, with 68% annual growth, though it generated just 27.3 billion yuan, or 5% of total revenue. That was 58% more than a year earlier.

Cainiao also generated positive operating cash flow in 2020 for the first time since its establishment seven years earlier, though specific figures have not been disclosed.

Cainiao and the Hainan government hope to attract an additional 1,000 merchants to the island. The company’s logistics service platform, which will digitize the entire supply chain from warehouse to purchase via smartphone, should halve the time required for shoppers to collect their purchases to an average 70 seconds, Cainiao said.

Alibaba to capitalize on Hainan duty-free shopping boom

Alibaba Group Holding Chairman and CEO Daniel Zhang, center, is briefed about an automated Cainiao packing system. (Photo by CK Tan)

Hainan is home to 10 duty-free shops with a total floor space of 210,000 sq. meters. Some 650 international brands are represented now, including Estee Lauder, Cartier, Bulgari and Tiffany & Co., up from about 100 a year ago.

State-owned China Tourism Group Duty Free, which operates eight of the island’s duty-free shops, applied this month to the China Securities Regulatory Commission for permission to list its stock on the Hong Kong Stock Exchange. The shares are already listed in Shanghai.

Separately, Zhang defended Alibaba’s group-buying business model as beneficial to China’s primary industries, including agriculture.

“The development covers the digitalization of retail and the supply chain, including logistics that supports the entire network,” said Zhang. “Every player within the supply chain hopes to combine both retail and logistics in a network that links rural areas and urban cities, creating change and opportunities.”

Nice Tuan, a group-buying platform backed by Alibaba, was fined 1.5 million yuan by Chinese regulators on May 27 for failing to correct anticompetitive practices previously identified by the State Administration for Market Regulation, including underpricing goods to the detriment of small retailers. It was also ordered to suspend operations in one province for three days.

Additional reporting by Narayanan Somasundaram in Hong Kong


Japan travel news, japan travel guides, japan holiday destinations and japan reviews

LATEST NEWS

NEWS RELATED

Readers rally to Hong Kong's Apple Daily despite official warning

HONG KONG — Warnings from Hong Kong’s top security official against “associating” with Apple Daily appeared to backfire on Friday as city residents swarmed newsstands and shops to buy copies of an expanded run of the outspoken newspaper, a day after five of its top editors and executives were arrested…

Read more: Readers rally to Hong Kong's Apple Daily despite official warning

LG seeking patent lawsuits as source of cash

By Kim Bo-eun LG Electronics’ headquarters in Yeouido, Seoul / Yonhap LG Electronics is seeking new sources of revenue by tapping into its trove of telecom-related patents after shutting down its loss-making handset unit. “We are continuing to look into ways wireless patents can be utilized, and patent suits can…

Read more: LG seeking patent lawsuits as source of cash

Google fixes another zero-day exploit for Chrome

This is seventh documented zero-day exploit for Chrome that Google had to fix this year Google has updated the Chrome browser to 91.0.4472.114 and the most notable thing about the update is that it fixes the seventh documented zero-day exploit for the web browser this year. Google Chrome will attempt…

Read more: Google fixes another zero-day exploit for Chrome

Slice brings on board Siva Kumar Tangudu as CTO

slice, a fintech startup and credit card challenger, has announced the appointment of Siva Kumar Tangudu as the company’s new chief technology officer, said a statement issued today. Tangudu brings with him leadership expertise of over 15 years across senior and pivotal roles at Myntra, HackerRank, Microsoft, and Oracle, to…

Read more: Slice brings on board Siva Kumar Tangudu as CTO

Local OTTs gaining ground as Netflix falters

By Kim Bo-eun Local over-the-top (OTT) media service providers are stepping up their game with a greater choice of content as they seek to compete with global giants such as Netflix, and their focus on this appears to have started paying off, given their recent growth in monthly active users…

Read more: Local OTTs gaining ground as Netflix falters

Samsung stops selling the Galaxy Z Fold 2 in the US

NEW DELHI: Rumours suggest that Samsung is all set to launch its next generation Galaxy Z Fold 2 smartphone in August. Along with the Galaxy Z Fold 2, the company is also expected to unveil the Galaxy Z Flip 3 and the latest Galaxy Watch 3 series.Now, ahead of the…

Read more: Samsung stops selling the Galaxy Z Fold 2 in the US

Nuclear research institute breached in suspected cyberattack: ministry

SEOUL, June 18 (Yonhap) — South Korea’s science ministry said Friday it is investigating a potential hack into a state-run nuclear research institute after its internal network was breached last month. A Ministry of Science and ICT official said the Korea Atomic Energy Research Institute’s network was breached multiple times…

Read more: Nuclear research institute breached in suspected cyberattack: ministry

Secondhand retailer Zhuanzhuan Group bags USD 100 million Series D1 from Xiaomi and others

Xiaomi participated in Zhuanzhuan Group’s latest round, as the startup hopes to synergize with Xiaomi’s position in consumer electronics.

Read more: Secondhand retailer Zhuanzhuan Group bags USD 100 million Series D1 from Xiaomi and others

You will now see ads in Instagram Reels

Partner Spotlight: Western Australia's Epic IT

TicWatch E3 with Snapdragon Wear 4100, Wear OS launched at Rs 20,999

Chinese used car dealer Uxin to raise $315m from NIO, Joy Capital

ShareChat parent to buy back ESOPs worth $19 million

Why businesses need a data integration platform

Windows 11 leak criticised as an early, incomplete build

Eclipse launches group to shepherd popular Java IDE

OTHER NEWS