- China supply chain business moves into Alibaba’s core commerce unit
- Overseas logistics remains independent as Cainiao sharpens its international focus
Alibaba has completed a major restructuring of logistics arm Cainiao, folding its domestic supply chain operations into the group’s China e-commerce business while retaining its overseas logistics and logistics technology units as a standalone business, Chinese media reported on July 9.
The reorganization, completed on July 1, moves Cainiao’s China supply chain unit under Alibaba’s Taotian Group — comprising the Taobao and Tmall platforms — marking the latest step in the company’s effort to align logistics more closely with its domestic commerce operations.
The changes do not affect employee contracts, Alibaba said in a statement.
The move comes weeks after social media speculation that Alibaba planned to dismantle Cainiao, a claim the company publicly denied.
Closing the loop
The restructuring extends a strategic shift that began after Alibaba withdrew Cainiao’s planned Hong Kong IPO in 2024.
At the time, then-Chairman Joe Tsai said Alibaba wanted to manage e-commerce and logistics as a single business to improve cost control, pricing and customer experience.
The latest changes effectively complete that strategy. By bringing domestic logistics back into its core commerce operations, Alibaba is creating a more vertically integrated model in which online transactions and order fulfillment operate under the same organizational structure.
The approach contrasts with arch rival JD.com, which built its competitive advantage by developing its own nationwide logistics network in 2007 before expanding its broader retail ecosystem.
Global ambitions remain
While its domestic operations are being absorbed into Alibaba’s e-commerce business, Cainiao’s international operations will continue to operate independently.
The overseas business now accounts for more than half of Cainiao’s revenue, with an increasing share coming from customers outside Alibaba’s ecosystem.
The company operates more than 50 overseas warehouses across 18 countries and regions, while its cross-border logistics network reaches more than 200 markets worldwide. Its “Global 5-Day Delivery” service has expanded to 14 countries.
People familiar with the matter said the international business could seek new outside investment in the future.
Why it matters globally
The restructuring reflects a broader shift in China’s e-commerce market, where competitive advantage is increasingly determined by fulfillment efficiency rather than customer acquisition.
For Alibaba, integrating domestic logistics while keeping Cainiao’s international operations separate allows the company to optimize its core retail business.
The overseas unit is also evolving beyond serving Alibaba’s own platforms. Its logistics technology business has expanded rapidly overseas, serving 26 Fortune 500 companies across 36 countries and regions.
This business network positions Cainiao as a player increasingly on a collision course with global logistics providers such as DHL and FedEx in cross-border supply chains.
