Cainiao Network - Alibaba Logistics Infrastructure

WAN Lin, President of Cainiao Network

 Logistics in China: Scale and Growth

Average Daily Package Volume (Mn)

CAGR:46.4% CAGR:42.1% CAGR:7.5%

110

69

（2） 51
China
41
38
Cainiao（1）
22 （3） （3）
US US
China（2）
Cainiao（1）

2014 2017 2014 2017 2014 2017

Notes:
(1) Represents average daily packages processed by Cainiao Network in calendar years 2014 and 2017
(2) Represents express courier average daily packages in calendar years 2014 and 2017 according to the State Post Bureau of China
(3) Represents combined daily average packages of UPS, FedEx, DHL Express (source: Bloomberg) and United States Postal Service in
calendar years 2014 and 2017
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 Logistics in China: Higher Efficiency
(1)
# of Logistics Orders during Singles Day (Mn) Average Cost per Package of an Express Courier Partner (RMB) (3)
Time to Fulfill the First 100mn Orders (Days) (2)

9.0 812 CARG：-16.7%

2.8

152

2013 2014 2015 2016 2017

2013 2014 2015 2016 2017
Notes:
(1) Represents the number of logistics orders Cainiao Network processed on Singles Day
(2) Represents the number of days for the first 100mn logistics orders from Singles Day to be delivered to consumers
(3) Represents the average cost per package for an express courier company partnered with Cainiao (Source: GF Securities)

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 Logistics in China: Upgraded Demands

Consumers Merchants Logistics Partners

Differentiated Delivery Demands Integration of Online and Offline Supply Chains Efficiency Bottlenecks
Over 70%  (1) consumers accepting Couriers butting up against daily delivery capacity
alternative parcel-collection services

Note:
(1) According to AliResearch

4
 Cainiao’s Strategy

New Retail Supply Chain Solutions Global Logistics Network

Digitized Logistics Infrastructure

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 Digitization Upgrade across Entire Logistics Chain

High Penetration of Smart Routing and Over 10 Mn sq.m of Courier Service Rating System Diversified Last-mile Solutions
E-shipping Labels & Address Database Dynamic Forecasting Digitally Connected Covering 6 Major
（1） （1）
Warehouses Express Courier Companies in China
Note:
(1) As of June 30, 2018

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 Upgraded Last-mile Network
Enhancing Consumer Experience
Last-mile Challenges in China Largest Last-mile Network China’s Unique Last-mile Solution Provider

Delivery Personnel Efficiency Bottleneck

10mn+
Diversified Consumer Demands parcels per day (1)

Self-Pickup Pick-up Lockers Door-to-door Delivery

Note:
(1) As of the date hereof

7
 Cainiao Smart Voice Assistant

AI-driven Technology Reduced Daily Call Time

Enhancing Communications With Consumers
160,000 Hours

Source: Internal estimation

Technologies supported by Ali Xiaomi and DAMO Academy

8
New Retail Supply Chain Solutions

9
 New Retail Supply Chain Infrastructure

Multi-tiered Warehousing Network Hub-and-spoke Network On-demand Delivery Network

(1) (1)
Over 10mn sq.m warehouses covering Over 10,000 routes help merchants place Instant delivery capabilities
(1)
urban and rural areas inventories closer to consumers covering over 200 cities

Note:
(1) As of June 30, 2018

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 Fast-growing Fulfillment Network

Fast Network Expansion Record-Breaking Capacity Consumer Experience Enhancement

(1) (2)
Year-over-year Order Growth Daily Peak Processing Capacity Same-day and Next-day Delivery Coverage

Doubled 50 Million Items 1,500+ counties and districts

Notes:
（1）Daily order volume of fiscal year 2018 versus fiscal year 2017.
（2）As of June 30, 2018.

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 New Retail Supply Chain Solutions

Offered the consolidated inventory management solution to a well-known A well-known health and beauty retailer transformed its stores
international FMCG brand, significantly improved consumer experience into a store-based warehouse network through inventory-sharing, system integration
and fulfillment efficiency and instant delivery capabilities

Cross-region Shipment Inventory Turnover (2)

Average Delivery Time / Shortest Delivery Time
Reduced by (1) Improved by (1)

60% 30% 40 mins 8 mins

Average Order Volume (3)

(1) (1)
Online In-stock Rate Sales Increased by
10 times in two months
>95% 10%

Notes:
（1）Represents the improvements as of June 30, 2018 after adopting Cainiao's services
（2）Represents the delivery speed as of June 30, 2018
（3）Represents the order growth after adopting Cainiao's services, compared to the order volume beforehand
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 Cutting-edge Technology and Innovation

Smart Routing Agile Automation Unmanned Vehicles Future Parks

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Global Logistics Network

14
Logistics Infrastructure for Globalization within the Alibaba Ecosystem

Global Supply Chain Network

Global Shipping Network Global Last-mile Network

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 Global Smart Logistics Network

Key Improvements – Imports Key Improvements – Exports

Tripled YoY import order growth (1) Over a million orders per day (2)

Operating ~1mn sq.m bonded warehouses (2) Multiple e-commerce intercontinental charter
flights, enhancing cross-border delivery capabilities
Cainiao Customs Clearance Platform connects with Average delivery time reduced to within
most major ports in China 10 days for France and Spain, etc. (2)

Customs Clearance Platform technology

sharing with Malaysia

Notes:
（1） Daily order volume of June 2018 versus June 2017
（2）As of June 30, 2018.

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 Customs Clearance Efficiency Improved by AI

（1） （2） （3）

Operating Efficiency Classification Accuracy Customs Clearance Efficiency

5 Min
5 Sec
98%+ 2+ Days
10 Sec

Notes:
（1）Represents the personnel efficiency improved after adopting Cainiao's services
（2）As of June 30, 2018
（3）Represents the industry average customs clearance time compared to the fastest time with Cainiao’s services.
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 Global Smart Logistics Infrastructure

Launch of 6 e-Hubs around the

world to build the logistics
infrastructure for inclusive
global trade

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24 Hours Delivery
Anywhere in China
MISSION 72 Hours Delivery
Anywhere Globally

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THANK YOU