Nippon Express inks deal with Alibaba Group

Japan's largest logistics provider, Nippon Express has concluded a deal with e-commerce giant Alibaba Group Holdings, under which the Japanese shipper will transport goods from companies doing business on Alibaba's TMall.com platform to China, while an Alibaba affiliate will handle home delivery, Nikkei news agency reported.
Goods can either be flown when ordered or shipped by sea in advance and stored in warehouses.

Nippon Express teams up with Alibaba. Courtesy: Nippon Express
Nippon Express teams up with Alibaba. Courtesy: Nippon Express

In teaming up with TMall, which controls 60% of China's online retail market, Nippon Express aims to handle half of all online purchases headed to China from Japan.
According to the Nikkei report, Japan Post currently ships 90% of on-line purchases sent to China via airmail with its express-mail service. But a fee hike of around 30% in June to 1,400 yen (US$13.68) for packages up to 500 grams has raised headwinds to the service's use. Nippon Express will keep fees for similar items around 1,000 yen, aiming to pick up customers put off by the increase. Both services take four to six days for delivery in China

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Nippon Express and Alibaba will also take on the complex business of dealing with customs for companies on TMall. China updated rules on cross-border e-commerce in April and now requires such detailed information about what is being shipped, prices and logistics to be submitted electronically.
Nippon Express will be the first Japanese logistics company to create a digital link with Alibaba allowing this data to be combined and submitted in one neat package.
China's cross-border e-commerce retail market is expected to grow roughly twelvefold from 2014 levels to US$245 billion in 2020, according to US professional services company Accenture.
Other Japanese companies already are competing with Nippon Express by offering better and cheaper shipping options to China. In April, Yamato Holding inked a partnership with companies including JD.com, TMall's smaller rival, to offer international shipping and home delivery, while ANA plans to offer a service handling everything from customs procedures to delivery starting in September.

In a separate move, Nippon Express is reportedly planning to add a rail link to its list of delivery options between China and Europe. According to a Nikkei report, the Japanese logistics provider is looking to start two rail services a week from Wuhan in China to Germany’s Duisburg, and one weekly trip from Duisburg to Chongqing.

Nol van Fenema

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