In the last weeks of 2024, there were a number of rumours that Cainiao, Alibaba’s logistics affiliate, would go through a “massive restructuring”. A few ecommerce and logistics experts in the Momentum Works community had also discussed the potential impact on Alibaba’s domestic and international ecommerce businesses.
In January, media in China revealed that Cainiao was indeed going through some ‘adjustment’. The objective was “to become a real logistics company, one that focused on logistics operations”. Judging from the tone of the report, the media probably obtained an official but unannounced version of Cainiao’s restructuring.
In detail, the 400 people team in Cainiao International that was servicing AliExpress (Alibaba’s cross border ecommerce platform) would be transitioned to newly-integrated Alibaba Ecommerce Business Group. Ding Hongwei, the Cainiao executive in charge of this team, now reports to both Jiang Fan, CEO of Alibaba Ecommerce and Wan Lin, CEO of Cainiao.
Wan Lin, CEO of Cainiao
In addition, both domestic supply chain solutions and e-waybills teams would be handed over to Taobao and Tmall Group, which manages Alibaba’s domestic ecommerce platforms.
A Brief History of Cainiao
Cainiao Smart Logistics Network was founded in 2013 as Alibaba’s logistics arm. Over the years, it has grown into a comprehensive logistics group with businesses including smart logistics solutions, warehouses and logistics asset management, as well as one of China’s largest pudo (pick-up/drop-off) networks – Cainiao Stations (菜鸟驿站).
A Typical Cainiao Station
Cainiao also has developed a global network, promising the ability of 5 days delivery to anywhere in the world.
In 2023, amid Alibaba’s restructuring into “1+6+N”, Cainiao was spun off as an independent group and filed for IPO. The company unveiled a wealth of data during the process – read Momentum Works report: Cainiao: Highlights of IPO prospectus for more details. However, the market sentiment was not positive back then, and the plan for IPO was eventually abandoned.
A key issue that arose during the process is Cainiao’s relationship with the various Alibaba ecommerce platforms: Taobao, Tmall, AliExpress, Lazada etc. If Cainiao’s logistics services remained independent of Alibaba platforms with its own P&L and platforms as a major customer, there would inevitably be some internal conflicts.
While Cainiao aimed to be profitable as an independent logistics entity, its primary customers—Alibaba’s own platforms—were focused on optimizing their logistics costs to maintain competitive pricing for consumers and merchants. This tension created inefficiencies, as Cainiao had to balance the need to generate revenue with the strategic demands of Alibaba’s broader e-commerce ecosystem.
The restructuring directly addresses this issue. By integrating Cainiao’s e-commerce-related logistics services into Alibaba’s e-commerce divisions, the company may eliminate the friction of competing priorities. In the near future, logistics operations supporting Taobao, Tmall, and AliExpress will be directly aligned with their respective business goals, removing the need for Cainiao to function as an external vendor negotiating service fees with its largest clients.
This transformation positions Cainiao as a true logistics company, allowing it to operate with a clearer strategic mandate. Rather than functioning as a semi-autonomous service provider within Alibaba’s ecosystem, Cainiao can now concentrate on scaling its logistics assets, improving operational efficiency, and expanding its global reach. This is particularly crucial as Cainiao continues investing in cross-border logistics and international markets, where its ability to offer competitive and scalable solutions will define its success.
Cainiao’s restructuring is also a crucial step in Alibaba’s broader effort to refine its corporate structure and financial priorities. As noted in Momentum Works Transforming Alibaba Report, “Most of the time, change is tough and difficult to execute. In the shoes of Alibaba, a large and highly complex organisation, this transformation would be a hugely challenging but necessary step to regain its vigour (and market share) amid a new environment.”
For Alibaba—and for any corporation—change is the only constant. The company has successfully adapted before, but with intensifying competition and shifting market dynamics, this latest transformation will be a formidable test of Alibaba’s ability to retain its leading position in China’s e-commerce and logistics landscape.
