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E-commerce

Alibaba moves to flatten distribution costs

Alibaba is working to cut its distribution costs after Chinese data indicated that fees are twice as high as abroad, the company’s media arm, Alizila has reported.

The Chinese ecommerce giant is partnering with several major logistics and transportation companies around the world to drive the cost of overseas shopping down to aide smaller exporters and expand the choices available to their customers.

In the last seven months Alibaba’s international B2B site has partnered with the likes of UPS, FedEx, Maersk, DHL and Kuehne & Nagel to assist with express delivery, container shipments and airfreight.

China Federation of Logistics & Purchasing data reveals that shipping expenses account for 30-40 per cent of overall product costs in China, compared with 15-25 per cent in developing countries and 10-15 per cent in developed countries.

“Express companies like FedEx and UPS were reluctant to serve SMEs since they were afraid of potential risk,” said Steve Su, Alibaba’s senior logistics expert.

“Alibaba as a platform can control the risk by evaluating the trading data of exporters, and this encourages third-party providers to offer better prices and even customized solutions for particular industries.”

There are currently more than 100 logistics companies and 1700 freight forwarders offering their services on Alibaba.com.

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