Cainiao Smart Logistics buys 20% stake in Air China Cargo

Alibaba’s Cainiao Smart Logistics Network has moved into air cargo with a US$248 million, 20% stake in Air China Cargo.

Cainiao’s 100% owned subsidiary Zhejiang Air Cargo made the investment in the state-owned airline. The move is in part due to problems with the seaborne cargo trade that has left many ports backed up and empty containers in the wrong places all over the world.

The logistics giant is not the first such Chinese player to enter the air cargo business. In August its direct rival bought Jiangsu Jingdong Cargo Airlines in a joint venture with Nantong Airport Group.

Both firms trail behind SF Express which set up SF Airlines in 2009. Cainiao has however been investing heavily in its network since the beginning of the year. It launched its first air cargo flight from China to Hungary in May, and has been investing heavily in its European network too. The Eastern European market, according to Cainiao, will see 30% growth in demand for Alibaba products in the coming year.

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