SF Express Splits with Alibaba Delivery Daughter

China’s market leader SF Express seems to have terminated its biz relation with Cainiao, the logistics arm of e-commerce giant Alibaba. This is evidenced by a new conglomerate formed by SF Express. The step comes as reaction to prevent Cainiao from dominating China’s courier service segment.
Meanwhile, Alibaba’s express daughter has struck back.

Based in Shenzhen, the new express conglomerate aims to operate a logistics network of 10,000 express delivery service points in 33 major cities by the end of this year. The company reportedly had funding of more than US$80m and its founder, chairman and CEO is SF Express chairman Wei Wang. Besides SF Express, the new venture named Fengchao Network Technology includes STO Express, ZTO Express, Yuanda Express and Global Logistics Properties. 
Cainiao was formed two years ago by Alibaba (holding a 43% stake) in cooperation with eight e-retailers and leading courier services including SF Express, operating a national courier service website named China Smart Logistic Network.

Cainiao retaliated instantly
Local press reports say that the new venture was set up on 6 June – less than a week after Cainiao hosted a meeting in Hangzhou for its logistics and delivery partners. SF Express was reportedly absent from the Hangzhou gathering.
To counter the activities of Fengchao Network Technology, Cainiao has meanwhile announced that Best Express and YTO Express will add new delivery points in Shanghai, Guangdong, Zhejiang, Jiangsu, Qingdao and Hainan, while new service points for the two firms will be expanded to 10,000 by the end of the year to cover all major cities in the country. Cainiao at present has over 20,000 service points in 187 cities in 20 provinces.

Nol van Fenema

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