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Alibaba to Expand Su pply Networkin China


  Chinese Internet giant Alibaba Group said it is investingas much as US$4.6 billion to build a network of warehousesacross China, asit looks to feedthe country´sboom in onlineshopping.

  The movewill directlybeneflt Taobao,an Alibaba unitthat is China´sbiggest shop-ping website bytransaction volume, and comes at a time when Alibaba saysChin.a´s logistics industry has insufficient capacity to meet theneeds ofthe country´s expanding electronic-commerce sector.

  Alibaba will commit an initial RMB 10 billion (US$1.52billion) to the warehouse project and, joined by financingpartners, more than RMB 30 billion over three to five years, said Zeng Ming, Alibaba´s chief strategy officer.

  The company is making the investment to help speeddelivery of products to consumers. "In 10 years, we hope thatanywhere in China you can buy a product online, and, atthe slowest, it will get to your home in eight hours," Alibaba Chairman Jack Ma said.

  Chinese couriers ship many of the goods bought onlinein China, and can often deliver items the day after an order fora fairly low price - the equivalent of a few dollars or less. Bute-commerce executives complain that the existing infrastruc-ture is often fragmented and inefficient.

  The regions Alibaba has chosen for initial warehouseconstruction include the areas around the northern cities ofBeijing and Tianjin, the Yangtze River Delta in east Chinaand the Pearl River Delta in southern China since each is amajor population center, the company said.

  Alibaba, which is 40% owned by Yahoo Inc., currentlyplans warehouse facilities in those three regions with totalfloor space around three million square meters, or the size of560 football fields, Alibaba said. Logistics partners,´Taobaosellers and other business-to-consumer websites will all be ableto use Alibaba´s warehouses, it said.

  The company said Alibaba.com Ltd., its business-to-business commerce platform, will also offer warehousing ser-vices to small Chinese exporters.

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