Alibaba logistics arm Cainiao partners with Hainan to bring smart logistics to duty-free island province

·2-min read

Cainiao, the logistics arm of Chinese e-commerce giant Alibaba Group Holding, is working on a supply chain pilot zone with the Hainan government, helping the southern island province improve duty-free services as it moves closer to achieving its free-trade goals.

As part of the partnership, the company will help build smart logistics infrastructure on Hainan’s main and outlying islands to attract more than 1,000 duty-free merchants, especially those that have not yet entered the China market, Cainiao announced during the Global Smart Logistics Summit on Thursday in Hangzhou.

The initiative will also involve building a smart service centre and global supply chain centre in Hainan, which Cainiao said will allow customers to complete a pickup within 70 seconds at designated locations, half the time it currently takes.

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Last June, Beijing announced plans to turn the tropical island, a popular holiday destination sometimes referred to as China’s Hawaii, into a free-trade port, similar to Hong Kong.

In the plan outlined by Beijing, the 35,000 sq km island would see income tax rates for select individuals and companies lowered to 15 per cent and relaxed visa requirements for tourists and business travellers.

The province, with a population of 9.5 million, will also enjoy loosened restrictions on trade, investment, capital flows and the movement of people and data by 2035, with the goal of gaining “strong international influence” by the middle of the century.

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Cainiao also said it will help upgrade Hainan’s global freight network, with plans to expand to more than 800 international cargo flights by the end of 2021. The announcement comes two months after the company launched seven weekly charter flights between Singapore and Hainan.

Hainan’s offshore duty-free sales rose 416.6 per cent to 15.39 billion yuan (US$2.4 billion) in the first quarter of this year, after growing 103.7 per cent for all of 2020 despite the disruption of cross-border travel from the pandemic, according to customs data.

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