Cainiao Network,  the logistics arm of Alibaba Group, has announced a long-term plan to establish its smart warehouse network in Southeast Asia, including Vietnam, Indonesia, Malaysia and Singapore.

It said the network, also comprising Cainiao Hubs (cHubs), will cover a total land area close to 2.5 million square meters.

"Equipped with cutting-edge technologies, the cHubs will play an instrumental role in the transformation of the logistics industry in Southeast Asia. The region’s sweeping urbanization and industrialization, rapid growth in e-commerce and the rising expectations of a direct-to-consumer model also puts cHubs in a prime position to establish an innovative supply chain infrastructure," Cainiao said, noting that this will support local B2B and B2C businesses.

E-commerce boom in Southeast Asia

 Eric Xu, general manager of Cainiao Smart Hub said the move solidifies Cainiao's commitment to "help shape the logistics industry in Southeast Asia."

"We believe this can further bolster cross-border trade and eCommerce growth for this region. Furthermore, strong export markets will be able to benefit from Cainiao’s supply chain management services which will drive export demand, with a peace-of-mind,” Xu said.

Cainiao noted that these cHubs are strategically located near key transportation nodes and manufacturing hubs in the region and are well-positioned to support its recovery, while tapping on the regional ecosystem’s connectivity to global markets to build a resilient supply chain.

The Chinese logistics firm also cited a McKinsey Global Manufacturing and Supply Chain Pulse Survey, showing that 45% of survey respondents were confident that the sector in Southeast Asia would recover in two to three months’ time, while 53% were confident that recovery would come within a year.

Cainiao said while the pandemic has sent many businesses into upheaval, it accelerated the boom in e-commerce.

It noted that e-commerce in Southeast Asia has expanded almost six times between 2016 and 2020 and is set to grow at a rate of 22% annually, to US$309 billion by 2025.