Posts

Here’s what you should know today.

1. SF Express opens branches in Vietnam and Thailand

SF Express, a subsidiary of SF Holdings, a Shenzhen, China-based express delivery firm, recently announced that its service centers in Vietnam and Thailand have formally opened for business.

The opening of the two offices are further evidence of the company’s continued efforts to invest in and expand its network in the ASEAN region.

“Vietnam and Thailand are the firm’s two most vital markets in the ASEAN region as well as two important trade partners targeted by China’s One Belt, One Road initiative, the Chinese government’s program to enhance economic ties with the countries of Eurasia,” the firm said.

The company also offers export services from Vietnam, Thailand to Cambodia, Myanmar, India, Indonesia, Mexico, Canada and Australia.

Read the rest of the story here.

 

2. LVMH Confirms launch of multi-brand fashion site

Launching in June, LVMH’s 24 Sevres will enter a fast-growing yet highly competitive luxury e-commerce space with fashion, cosmetics and luggage products from the group’s own portfolio as well as other brands.

Overall more than 150 labels, including 20 of LVMH’s own stable such as Louis Vuitton, Dior, or Fendi, will be featured.

Ecommerce is still a relatively small part of the global luxury goods market, representing 7 percent of industry sales, but this is expected to rise to 12 percent of industry sales by 2020, according to the Boston Consulting Group.

Luxury goods companies face a dilemma over trying to reach young Internet-savvy shoppers while preserving the sense of exclusivity that drives up the value of their products.

LVMH has already tapped into the increasing importance of online social media by setting up LVMH Luxury Ventures to invest in start-up luxury goods projects.

Read the rest of the story here.

 

3. Snap’s stock plummets after first quarterly results since its IPO

With Snap’s mobile app business still at a relatively early stage and most investors not expecting it to turn profit for another couple of years, user growth is an all-important metric for judging the company’s prospects for success. User growth has also been slower than predicted, with Snap reporting 166 million daily active users against an expected 167.3 million.

Year-on-year revenues were up by a massive 286 percent – but the reported quarterly income of $150 million still clocked in substantially lower than the US$158 million analysts had expected.

Read the rest of the story here.

Compared to Alibaba chairman and founder Jack Ma’s marketing skills and media savviness, SF Express’ founder Wang Wei is very much like the logistics service his company offers–low-profile, boring but indispensable. So indispensable to the growth of China’s economy and ecommerce market that after its February 23, 2017 IPO in Shenzhen, SF Express now has a market cap of $38 billion. FedEx, the quintessential delivery company founded in 1971, has a valuation of $51 billion for comparison.

Owning a whopping 68 percent of shares, Wang Wei’s net worth beat out Jack Ma’s earlier this month to become the 2nd richest person in China with 198.5 billion RMB (about $28.7 billion USD). He has already surpassed Tencent’s Pony Ma, whose company is behind the popular WeChat platform.

The Birth of A Logistics Empire

Despite being less known than Jack Ma in mass media and tech circles, Wang Wei’s story and slow grind to become the king of logistics in China is nonetheless as interesting and inspiring.

The son of a Russian language interpreter in the People’s Liberation Army and a university teacher, Wang Wei was born in Shanghai in 1971 and followed his parents to Hong Kong soon after. Growing up there, Wang Wei only finished high school and then started working for a local Hong Kong ‘uncle’ eventually ending up in a small printing shop in the city of Shunde in Guangdong province.

While sending printing samples to Hong Kong for clients to review, he noticed the increasing volumes and lack of available delivery options – the glimpse of an upcoming opportunity in logistics.

During his time in Shunde, China itself was going through a transformational process of opening up to the world under the leadership of Deng Xiaoping. Deng helped initiate the concept of “Special Economic Zones (SEZs)”– pockets of China that would be experimentally exposed to free-market forces. The Pearl River Delta (PRD), an area encompassing cities such as Shenzhen and Guangzhou, became part of the first SEZs and stimulated increased trade between it and Hong Kong.

Many Hong Kong businesses then decided to set up factories in Guangdong province leading to an increased demand for delivery services between Hong Kong and the mainland.

In 1993, at the height of China’s economic reform, Wang Wei at age 22, decided to partner with five friends to start Shunfeng (SF) Express. His dad provided a 100,000 RMB loan, about $13,000 USD, to get Wang Wei’s business off the ground.

Like the Ubers and Airbnbs first starting out, Wang Wei’s business model straddled the grey area as private courier businesses were ruled illegal in China until 2009. The only legal option was China’s inefficient national post office system but this didn’t stop SF express.

The early days consisted of Wang Wei personally hauling suitcases and backpacks across the Hong Kong border, working 15-16 hour days but he was determined to build his fledgling startup into China’s largest logistics company.

Shunfeng Express and Wang Wei’s Business Philosophy

For 20 years since the company’s founding, Wang Wei personally controlled 99.99% of SF Express and avoided any raising external funding. The lack of public exposure and venture capitalists has led to legendary stories of VCs offering around $70,000 USD to “bounty hunters” who could successfully broker a dinner meeting with the elusive SF founder.

Asked about his reasons for shying from media, Wang Wei once answered: “I believe in a higher power, I think, a person’s success has nothing to do with talent. Success is related to doing good deeds. Having a lot of money isn’t something to brag about, nor is having talent.

Being successful and making money is just a matter of fate. That’s why I don’t think people should brag about achievements in their career. Being low-key also brings benefits from a management perspective — if employees don’t recognize you, you are able to dig deeper and get to understand the real situation.”

In a move signaling an inevitable IPO, Wang Wei sold a 25% stake to a consortium of investors led by CITIC Capital Holdings Limited in 2013.

“I believe a company’s objective shouldn’t be making money. I want to create a platform through which I can express my values and thoughts. The sole purpose of going public is to get funding, which can then be used to fuel a company’s growth. SF needs funding too but SF cannot go public just because of the need for money. After an IPO, a company will be turned into a money-making machine with the daily ups and downs of the share price affecting the company’s morale, this makes it very hard to manage the company.”

“For me to run a business, I’d like to develop a business for the long-term, to provide people a means to a better and respectable life. But after going IPO, things will be different. You have to account for shareholders, you have to make sure your share value keeps increasing. Earning a profit becomes the company’s sole mission. This way, a company becomes very fickle just like today’s society.”

In a very Bezos-esque and Spiegel-esque move, retaining full control of his company allowed Wang Wei to execute his long-term strategies – mind you, SF was founded 24 years ago, before eBay and Amazon even existed.

“In order to run a successful business, you’ll need to relentlessly focus on the long-term. Once you go public, every penny, every small decision will be scrutinized by your shareholders. This is not something I can accept. I cannot promise short-term returns if I’m optimizing for the long-term. In addition, once you go IPO, you’ll need to start disclosing information. In order to compete with global giants, we need to keep our secrets. As a business owner, you need to really understand why you want to go public. Having said that, in the short-term, SF won’t go public. Even in the long-term, if we decide to go public, it won’t be for the sake of going public or for making money.”

IPO and International Growth

Despite Wang Wei’s well-intended efforts to keep his firm private as long as possible, the brutal reality is that his company operates in the commodity last-mile delivery space with quickly eroding margins – down to 5% from 30% 10 years ago according to analysts.

Alibaba’s push into aggregating all delivery services in China through its Cainiao platform has only exacerbated this. As a result, delivery companies in China have recently started their frantic race towards raising as much capital as possible, as fast as possible in order to get to scale in a winner-takes-all-market.

“SF Express, YTO, and the other China express delivery majors have all been racing to go public. Faced with shrinking profits and mounting competitive threats, the dream of being the “Fedex of China” has morphed into an arms race in capital and capabilities,” commented Jeffrey Towson, Professor at Peking University’s Guanghua School of management.

SF competitors such as ZTO Express and Alibaba-backed YTO Express all have recently gone public, with ZTO raising $1.4 billion at $12 billion valuation through its listing on Nasdaq and YTO achieving a valuation of almost $10 billion through its backdoor listing on the Shanghai Stock Exchange.

With competitors raising more firepower, SF had little choice but to follow suit and go public in Shenzhen via a reverse merger with a local mining company. This move turned Wang Wei into the third wealthiest individual in China and was richer than Jack Ma for a couple of days until SF shares dropped but this doesn’t signal the end to China’s logistics arms race.

According to Investment Professor Towson of Peking University, in order to keep scaling, China’s logistics leaders should look at international expansion – the rest of Asia being the most obvious initial step.

STO already has its biggest overseas delivery center in Hong Kong to enable pan-Asia deliveries within 24 hours and SF Express has been strategically located since the early days with its headquarters in Shenzhen, close to Thailand, China’s gateway to Southeast Asia.

With Alibaba’s acquisition of Lazada in Southeast Asia last year and JD’s entrance into Indonesia in 2015, it’s a no-brainer for the likes of SF to follow its largest Chinese customers into the next largest emerging market.

If SF led by Wang Wei enters Southeast Asia, expect a logistics war to be fought between Chinese entrants, local incumbents such as Ninja Van and Kerry Logistics, as well as global players like DHL and Singpost.

By: Sheji Ho, aCommerce Group CMO

Here’s what you should know for today.

1. China’s SF Express is the most valuable company in the stock exchange 

Shares of SF Express Co, China’s largest express delivery company, soared by 10% daily limit for a third time in five trading days since its debut, making it the most valuable company in Shenzhen Stock Exchange.

One month earlier, Maanshan Dingtai Rare Earth & New Materials Co., Ltd. and SF Express completed an asset swap that valued S.F. Express at an estimated $6.8 billion. The combined company now has 4.18 billion shares, and is currently worth S$25.5 billion.

S.F. Express’ IPO comes at a time when Chinese courier companies were hit by a lack of delivery staff and negative news reports revealing that major courier companies are mistreating delivery personnel. Listed companies including YTO Express and STO Express saw their shares plummet as a result during the past few days.

Read the rest of the story here and here.

 

2. China prepares its own digital currency

After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central banks to issue digital money that can be used for anything from buying noodles to purchasing a car.

Chinese people are embracing the online currency-paying for cokes using the QR code on their phones, and even going as far as issuing online money transfers instead of handing out red envelopes during Chinese New Year.

The People’s Bank then, is adopting the attitude “if you can’t beat them, join them.”

Read the rest of the story here

 

3. Recommended Reading: Nasty Gal, once a fashion world darling, is now bankrupt. What went wrong?

By 2011, its annual sales hit $24 million, an 11,200% jump from three years earlier, the company said publicly. Sales leap-frogged again in 2012 to nearly $100 million.

But it wasn’t long before sales started dropping — to $85 million in 2014, and then $77 million in 2015, according to bankruptcy documents.

Analysts said that Nasty Gal’s rapid growth was fueled by heavy spending in advertising and marketing. It’s a strategy that many start-ups use, but one that only pays off in the long-run if one-time buyers become loyal shoppers.

Read the rest of the story here.

Here’s what you should know before wrapping up the day.

1. Korea’s AIM raises $1.6M for its mobile trading service

Seoul-based startup AIM has closed $1.6 million in seed funding to bring its artificial intelligence-powered app for financial investments to market in Korea, and potentially other parts of Asia.

What is AIM: The fintech company has developed a system which works alongside existing investment institutions to allow users in Korea to make trades and investments via their smartphone.

AIM is already planning a launch in Singapore.

Read the rest of the story here.

 

2. S.F. Express to build Asia’s largest air freight hub in China

Chinese private logistics giant S.F. Express Co Ltd has pledged to build the busiest air cargo hub in Asia, reaching areas accounting for 80% of the country’s GDP within two hours. The firm said it would construct an airport in Ezhou city, Hubei province in central China, that could handle more than 2.6 million tonnes of freight and 1.5 million passengers by 2025.

 

Read the rest of the story here.

 

3. Recommended Reading: A day of reckoning for America’s department stores 

On January 6, the Neiman Marcus Group, currently owned by asset management firm Ares and the Canada Pension Plan Investment Board, withdrew its initial public offering a year and a half after filing with regulators.

Around the same time Neiman Marcus’ plans were publicly unraveling, Macy’s announced plans to close 68 of its 730 stores, eliminating more than 10,000 jobs along the way, many of them management positions.

What went wrong?  The convenience of ecommerce and a lack of progress in business models and lack of innovative customer experience.

Meanwhile, pureplay online players are venturing into offline popup shops and re-thinking the future of retail.  Fast fashion powerhouse Pomelo’s David Jou shares his view on a 360 retail experience here.

Read the rest of the story here.

This is the last of a four-part series breaking down Alibaba’s plan to shake up logistics in China: Cainiao Network. PART 1, PART 2, PART 3

Cainiao’s Platform Model Versus Jingdong’s Direct Model

By analyzing the aforementioned five pillars of Cainiao Network, we find that the implementation of its strategies cannot be achieved without collaboration with other partners such as warehouse storage operations. This reveals Cainiao Network’s business model implementation approach: a data-driven “platform model” (i.e. decentralized, horizontally integrated, asset-light).

Clearly, the platform model advocated by Cainiao Network is very different from the “direct model” (i.e. centralized, vertically integrated, asset-heavy) represented by Jingdong and SF Express and represents a different logistics development approach.

But it’s not a simple comparison – whichever fits a company’s own needs at any given stage is the most appropriate approach.

The advantage of the direct model of Jingdong lies in the high degree of control and better experience it can bring. As long as ecommerce logistics has massive demand reflected in warehousing and distribution, Cainiao’s platform model can achieve rapid growth.

In Cainiao Network’s view, the platform model is the inevitable future of logistics. Cainiao’s president Tong Wenhong believes that the direct model has no future and “Jingdong will eventually use Alibaba’s model in the future” on the grounds that Jingdong needs seventy to eighty thousand logistics personnel to process a daily parcel volume of one million and SF Express needs close to 400,000 logistics staff to handle a daily capacity of 4 million parcels.

When the number of China’s packages reaches 200 million, how many logistics staff will be needed to deliver them? The director of strategic cooperation at Cainiao Network, Li Wei, has said that “in the pyramid-shaped management structure of the direct model, each layer added will result in additional management costs of about 30% being passed along.”

The direct model ensures better service and timeliness, but it cannot solve the problem of scale. Cainiao hopes to help logistics companies through a platform approach with the goal of improving service and timeliness through technical means rather than brute (human) force.

Cainiao’s Platform Model Has its Skeptics—SF Express

Although Cainiao is very confident about its own platform model, its partners are not and some are even rejecting it. When Cainiao Network was established, it claimed bring innovation to the express delivery industry using a cloud system and warehousing storage system.

Two years later, these original strategies became the previously highlighted five key strategies: the express delivery strategy, the warehousing and distribution strategy, the pickup stations strategy, the cross-border logistics strategy and the rural logistics strategy.

The first three strategies almost closely control the operating lifeline of courier companies: that is, they intervene in terms of data, control delivery routes, and seize the last-mile. Needless to say, it will cause resistance by courier companies.

Take SF Express as an example. Even though SF Express and the “Three TOs and One Da” were all 1% stakeholders when Cainiao was established in 2013, they have expressed disagreements regarding their position with respect to Cainiao.

During the “Cainiao Jianghu Assembly”, more than 10 representative courier companies led by the “Three TOs and One Da” appeared to support Alibaba; only SF Express was absent. When facing the matter of business alliances, the strategies of the “Three TOs and One Da” are completely different from that of SF Express.

“The Three TOs and One Da” have difficulty coming to a resolution, while SF Express wants to get rid of the control of Cainiao Network platform and its ambition to be independent is abundantly clear. To show you why, let’s look at a simple comparison of SF Express and Cainiao Network.

cainiao business-model

Through the above comparative analysis, SF has been keeping an alert and sober eye on Cainiao for some time, and it has even tried to “challenge” Alibaba. The “Three TOs and One Da”, on the other hand, have been strategically ambiguous.

At present, it is hard to say who will win and who will lose—this is a long-distance race, and at this moment, the competition is more about who has made the best preparations for the future.

Conclusion

This three part series aimed to systematically review and analyze the commercial trajectory and development of Cainiao Network over the past two years since its establishment in 2013.

It also focuses on Cainiao Network’s strategic positioning to complete Alibaba’s own business ecosystem, and points out the five current strategic directions and implementation approaches of Cainiao Network. The main conclusions are as follows:

  1. Consumers have long complained about poor logistics in China. With the growth of the direct logistics approach of Jingdong, Alibaba’s logistics business has been at a greater and greater competitive disadvantage. This is the real reason why Cainiao has doubled-down building its own warehouses.
  1. Compared with the ecommerce and financial services business that Alibaba has successfully launched before, Cainiao’s current efforts involve many offline courier and logistics issues.

The complexity involved in completing the full integration of online and offline is beyond imagination – no precedent outside of China can be referred to. Also, Cainiao’s partners are cautious and alert and have their own contingency plans. Therefore, it is difficult to say whether Cainiao’s platform approach will be successful in the future.

Implications For Logistics in Southeast Asia

As Alibaba may have noticed, Southeast Asia shares a lot of similarities with China a decade ago, especially in terms of a nascent and fragmented logistics ecosystem.

Because of the pain points in logistics, plenty of investor funding has gone into this space. Companies like Ninja Van, Deliveree and the now-defunct Zyllem have raised millions to tackle the last-mile challenge in SEA – even Lazada invested in its own delivery fleet as part of Lazada Express (LEX).

In this kind of environment, introducing a platform like Cainiao would make a lot of sense. A central platform with large address database and route optimization would improve the efficiency of logistics in the region.

On the other hand, it could also spell bad news for last-mile delivery companies in the region because Cainiao would end up controlling the supply of packages, the data, the rules, and potentially turn last-mile logistics into a price-driven, commodity play.

Alibaba was able to get Cainiao off the ground due to the massive order volume from Tmall and Taobao combined. In SEA, there’s no single dominant player who commands the bulk of all orders making Alibaba’s acquisition of Lazada a likely first step towards introducing Cainiao. As we’ve seen with Alipay and Ant Finance, Cainiao in Southeast Asia may not be a matter of “if” but rather “when”.

The original first appeared in Chinese on Yunbao88. Concluding excerpt by Sheji Ho, editing by ecommerceIQ team.

This is the first of a four-piece series breaking down Alibaba’s plan to shake up China’s logistics: Cainiao Network. Part 2, Part 3, Part 4

The Beginning

In May 2013, Alibaba, along with Yintai Group, FOSUN Group, FORCHN Logistics, SF Express and a group of leading Chinese last-mile logistics companies conveniently labeled “Three TOs and One DA” (YTO Express, STO Express, ZTO Express and Yun Da Express) established Cainiao Network Technology Co. Ltd.

This consortium led by Alibaba is committed to building a “China Smart Logistics Network (CSN)” to realize 24-hour delivery of any product to anywhere in China and a total of 300 billion RMB ($43 billion USD) was invested to kickstart the project.

Alibaba’s announcement of Cainiao and Jack Ma entering the logistics industry was like an atomic bomb dropping, with rippling effects across the entire value chain including the Internet, ecommerce and real estate industries. People soon started speculating that similar to how Taobao transformed an entire generation’s shopping behavior, Cainiao would disrupt and change the traditional logistics ecosystem.

But during the noise, Cainiao retreated into silence. There has been very little public information about the company except for leaked news that it had been gradually acquiring more land as part of a much bigger and soon to be revealed strategy.

All this changed two years later on May 28, 2015, when Alibaba held the “Cainiao Jianghu Assembly” to officially launch Cainiao, along with answers to a series of personnel changes and the strategic positioning of Cainiao Network’s future.

This four-part series intends to shed more light on the series of actions and arrangements made during the period of time between the establishment of Cainiao Network in 2013 and the May 2015 assembly.

We will learn more about Cainiao Network’s underlying business model, why Alibaba initiated it and what the implications are for industries inside China and beyond. With Alibaba’s march into Southeast Asia through the Lazada acquisition, there may be signs that Jack Ma’s Cainiao Network strategy may not only be limited to China.

Analysis of Cainiao’s Ownership Structure

To fully understand Alibaba’s Cainiao strategy, we need to dive deeper into the consortium’s ownership structure. Who are the key players and their intentions? Their backgrounds and roles within the consortium and their percentage share holdings reveal Jack Ma’s master plan.

As mentioned at the beginning of this article, Cainiao’s investors include Alibaba, Yintai Group, FOSUN Group, FORCHN Logistics, SF Express and “Three TOs and One Da”. The proportion of each investor’s investment is shown in the table below:
cainiao southeast asia

Brief introduction and analysis of each investor’s background:

First, FOSUN Group founded in 1992, is mainly engaged in real estate investment, pharmaceutical and steel industries, and its far-reaching professional experience ranges from land acquisition, construction, and warehouse real estate property management.

Second, Yintai Group has long been involved in department store chains, particularly in supply chain management. When Cainiao Network was first established, Shen Guojun from Yintai Group was appointed as its CEO. It was because of Yintai Group’s strengths in this area that Shen Guojun was appointed to take charge of Cainiao’s warehouse and logistics operations.

Third, Alibaba’s stake in Cainiao Network accounts for the largest chunk — a 43% of total investment. This is mainly based on the following:

  • Alibaba has a lot of capital
  • Alibaba is acting to unite different parties in order to address its own weaknesses with regards to warehousing and logistics
  • Alibaba has always favored an asset-light, platform approach (i.e. Taobao and Tmall) and doesn’t plan to become an asset-heavy organization. Let other players do the heavy lifting while Alibaba invests into and builds a platform for intelligent logistics it is able to unify and control the flow of information and finance.

Given that Cainiao could be considered a logistics play, then why have the “Three TOs and One Da” companies and SF Express each invested only 50 million RMB ($7.2 million USD) to account for 1% of total investment?

SF Express and the “Three TOs and One Da” are courier companies. Their participation reflects the resolution of Cainiao Network to become China’s logistics backbone, while also ensuring that risk can be properly dispersed. But why do they account for such a tiny stake?

This may be due to Alibaba’s business arrangement considerations. Through analysis of the relevant investors, we can see that in the future business operations of Cainiao Network, FORCHN Logistics will be mainly responsible for line-haul logistics, and the “Three TOs and One Da” companies and SF Express are left to compete for last-mile delivery.

Through this shareholder structure: FOSUN builds warehouses, Yintai manages warehouse operations, FORCHN is responsible for line-haul logistics, the “Three TOs and One Da” companies take care of last-mile delivery, and Alibaba provides the platform and controls flow of information and financial reconciliation.

The stage is set for Cainiao Network to become the single biggest backbone for logistics in China.

Analysis of Cainiao’s Executive Team

Within the short two years after the founding of Cainiao Network, the company has been through several executive changes. All of which were strategic and diving deeper provides additional insight into Cainiao’s strategy.

When Cainiao Network was first established in 2013, Jack Ma himself served as chairman of the board and Shen Guojun served as CEO. One year later, Shen Guojun became executive Chairman of the Board of Cainiao Network while Zhang Yong, COO of Alibaba Group at the time, took over as CEO instead.

Finally, in 2015, it was disclosed at the “Cainiao Jianghu Assembly” that Tong Wenhong would serve as president of Cainiao Network, specifically responsible for Cainiao Network’s business operations. Who are these big shots?

Shen Guojun (Cainiao Network Founding CEO; former Chairman)

cainiao southeast asia

Shen Guojun founded China Yintai Investment Co., Ltd. in 1997 and served as Chairman of the Board. As the founder of Yintai Group, Shen Guojun led the company’s expansion into commercial retailing, real estate development and natural resources, eventually becoming the 97th richest person in China with an estimated net worth of $2.3 billion.

Shen has also established many well-known landmark projects such as Beijing Yintai Center, Hangzhou Lake Coast Yintai, Hangzhou Wulin Yintai Department Store, Hangzhou West Yintai City, Chengdu Yintai Center and Ningbo Yintai Universal City just to mention a few. As of 2015, Shen Guojun retired as chairman of Yintai Group Board of Directors and Zhang Yong from Alibaba took over.

Zhang Yong (former Cainiao Network CEO, current CEO Alibaba Group)

cainiao southeast asia

Zhang Yong is the current CEO of Alibaba Group, a member of the Alibaba Group Board of Directors as well as a founding partner of Alibaba. A Shanghai native, Zhang Yong started out his career in auditing and advisory at Arthur Anderson and PricewaterhouseCoopers in Shanghai.

In 2005, he joined Shanda Interactive Entertainment Limited, a leading online game developer in China, as CFO. During his two-year stint at Shanda, he led the company through a rapid growth period culminating in a public listing on NASDAQ.

In August 2007, Zhang Yong left Shanda to join Alibaba Group to serve as Taobao’s CFO and later COO of Taobao and General Manager of Taobao Mall. In 2011, as Taobao Mall spun off from Taobao to become Tmall, Zhang Yong served as its president. During his time heading up Tmall, Zhang Yong grew the platform into one of the world’s largest ecommerce marketplaces and is also credited for inventing the Singles’ Day 11.11 mega shopping event.

Since September 2013, Zhang Yong has served as the COO of Alibaba Group, responsible for both Alibaba Group’s domestic and international operations. He has led Alibaba Group in its continuing transition towards mobile, established an integrated global logistics network – Cainiao Network, and launched the Alibaba international platform where China’s consumers can buy global brands – Tmall International. Zhang Yong has also led a number of important strategic investments for Alibaba Group, including Ali Health, Haier Electric, Yintai Business Group, and Singapore Post.

On May 7, 2015, Alibaba Group announced that Zhang Yong would become the CEO of Alibaba Group and, at the same time, serve as Chairman of Yintai Group’s Board of Directors.

Tong Wenhong (current President and COO of Cainiao Network)

cainiao southeast asia

In a classic rags-to-riches story, Tong Wenhong joined Alibaba in 2000 and slowly worked her way up from front desk receptionist to Alibaba Group Senior Vice President. Today, she’s a partner at Alibaba and serves as COO of Cainiao Network as well as Alibaba Group SVP.

With a strong team spearheading this ambitious project by Alibaba, how will they structure a business model to be a strong contender against competitors like JD? The next article in this series will focus on the formation of Cainiao Network’s strategy and further glimpse into Jack Ma’s plans.

The original first appeared in Chinese on Yunbao88. Editing by ecommerceIQ team. Sign up for eIQ newsletter for updates.