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Alibaba launching logistics network (2)

By Chen Yang (Global Times)

08:51, January 25, 2013

The average number of daily packages shipped by Alibaba's e-commerce platforms Taobao and Tmall surpassed 12 million in 2012. During the online sales promotions for 2012's Singles' Day (November 11), the number topped 72 million, data from Alibaba showed.

Alibaba said launching the network does not mean that it will enter the logistics or express delivery industries, and the network is open to manufacturers, e-commerce companies and courier firms.

"Alibaba accounts for more than half of China's online retail market, so a self-built logistics system not only takes a lot of investment but might also result in a monopoly in the express delivery sector," Feng Lin, a researcher at China e-Business Research Center, told the Global Times on Thursday.

Other major online retailers such as 360buy.com, Suning and Vancl have chosen to build their own logistics systems.

"Building a self-owned logistics system can help improve customer service, but it requires a large investment and takes a long time," Su said.

Analysts also expressed concerns about the future operation of the Alibaba alliance, as Alibaba noted that companies involved in the project should not expect a return on investment for five to eight years.

"Companies might lack impetus to join the network. Furthermore, how to share earnings between Alibaba and other participants will be a problem," Feng said.

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