As bilateral trade between the two regions continues to boom, the Cainiao Smart Logistics Network will operate a new route direct from Hong Kong, China, to Lagos, Nigeria. Before Cainiao stepped in, it took 60 days to ship goods from Hong Kong to Lagos, as aeroplanes had to transit through the Middle East. Now it’ll take as little as twenty. ‘The newly launched air route is a further expansion of Cainiao’s global cross-border parcel network’, said William Xiong, Cainiao’s chief strategist and general manager of export logistics.
Who Is the Cainiao Group?
As of March 2021, Cainiao—the logistics affiliate of China’s renowned Alibaba Group—processed more than 5 million cross-border parcels daily. To do so, Cainiao collaborates with local shipping companies to improve efficiency and streamline the supply chain customer experience. With its open data platform and worldwide routes, the group aims to deliver anywhere in China within 24 hours—and across the globe within 72.
For the past 11 consecutive years, China has been Africa's largest trading partner. Now, as African nations accumulate more purchasing power, consumers want Chinese-made fabrics, green tea, apparel, home appliances, and electronics. To put that into numbers, the African e-commerce market is projected to reach US$34.6bn by 2024, with an average annual growth rate of 17.1%. And in 2019 alone, Nigeria purchased the largest amount of Chinese goods in the world.
As such, Africa is Cainiao’s most critical emerging market. One might imagine that the global pandemic would have put a damper on Chinese-African e-commerce and trade, but according to the General Administration of Customs People’s Republic of China, bilateral trade between the two regions increased in Q1 of 2021 to US$51.2bn. Together with local logistics partners’, explained Xiong, ‘we strive to provide African consumers with efficient door-to-door delivery’.
What Will the New Air Cargo Route Accomplish?
A direct China-Africa route will capitalise on an already growing African e-commerce market. Even now, key parts of local cultures, such as green tea and wax fabrics, have woven tight threads between China and the African continent. In May, China reported 163% year-on-year growth as compared to the year before. And as domestic African supply chains struggle with COVID and demand overseas imports, the Chinese government fully intends to capitalise on this transcontinental relationship.
In short, Cainiao’s new link to Nigeria will further solidify Chinese influence in the region. The Alibaba Group will certainly profit by adding e-commerce to the network of Chinese rail lines, statues, and public infrastructure projects that span the continent. Said Cainiao’s Xiong: ‘[This cargo route] will enhance logistics efficiency’. Yet it will also place the company at the forefront of international shipping—and put it one step closer to achieving market dominance.