Cainiao Smart Logistics, the logistics arm of Alibaba Group, has announced it has entered a partnership MOU agreement with Korea SMEs and Startups Agency (KOSME) to officially serve as the logistics partner for SME export business in South Korea.

In a statement, it said that the MOU aims to promote bilateral trade, and foster multi-faceted collaboration to spearhead the expansion and development of the e-Commerce industry between South Korea and China.

Cainiao noted that this is a "major milestone" for Cainiao as it extends its logistics services to merchants outside the Alibaba ecosystem in South Korea to make it easier for them to tap on the overseas markets.

In line with the MOU, Cainiao will be KOSME’s official logistics partner for their logistics subsidy program which will provide up to 15 million won in subsidies per company to cover approximately 70% of their export expenses such as e-Commerce logistics.

"The objective is to help SMEs tide over this uncertain economic situation by accessing the Chinese market," it said.

Last year, the program has facilitated the logistics for over 3.7 million online exports and reduced SMEs’ export logistics cost by an average of 48% or up to 82% when benchmarked against Express Mail Service (EMS)’ market rate (across 10 major countries), Cainiao said.

As part of the agreement, SMEs will be able to leverage Cainiao’s one-stop logistics management system which provides real-time insights and support across warehouse inventory, order fulfillment, delivery status, billing, and any forms of anomalies for immediate rectification.

"SMEs are the growth engines of the economy. We are honored to be selected as KOSME’s official logistics partner to support millions of South Korean SMEs in their expansion into new markets to establish business resilience. As a trusted partner to KOSME and Korean SMEs, our goal is to make cross-border logistics as seamless as possible, by taking care of the digitalized full-chain including order fulfillment, local and overseas B2B and B2C warehousing, international shipping, customs clearance as well as first and last-mile logistics," said James Zhao, General Manager for Global Supply Chain, Cainiao Network.

Reduced shipping time cited 

This news comes after Cainiao’s official launch in South Korea last year to provide end-to-end logistics services for businesses’ import and export needs.

This includes over 15,000 square meters of warehouse space in South Korea, sea and air freight - six cargo ships and six cargo planes weekly, and various logistics partnerships that provide first and last-mile delivery and facilitate customs clearance in South Korea and China.

This full-chain service has brought about up to 50 percent improvement in shipping efficiency, reducing total shipping time from 10 to 13 days to just 5 to 7 days.