Dangdang sets up logistics site to aid strong web sales

Dangdang.com, a New York-listed Chinese company that mimics Amazon.com, announced yesterday it will set up a platform that brings together the country's leading express delivery companies and e-commerce firms keen on improving their logistical services.

The planned site is expected to cover some 1,200 domestic cities and offer cash on delivery services. Additional details were unavailable as the site is currently undergoing testing, according to the company's statement e-mailed to the Global Times yesterday.

"We are in charge of receiving, sorting, packing and assigning products, then we allot the third party express delivery firms to transport and distribute products," Zhang Yun, a vice president with dangdang.com, said yesterday.

"Cooperating with express firms is a win-win solution, that is letting professional companies concentrate on their core businesses, " Zhang said.

Dangdang is not the first company to set its sights on entering the logistics sector.

Alibaba Group, the country's largest e-commerce company, announced last month it planned to spend up to $4.5 billion, together with its financing partners, to set up a network of warehouses to better manage online shopping. The total investment will be finished within three to five years, according to a company statement e-mailed to the Global Times.

"We welcome VCs, PEs and other financial capitals to cooperate with us entering into the logistics area," said Zhang Wei, vice president of Strategic Investment Dept with Alibaba.

Industry watchers said both Dangdang and Alibaba's platforms will be helpful for some logistics firms.

"The two e-commerce giants both want to combine their affluent e-commerce information with logistics services, which (are still in the maturation process) in the country," Feng Po, an analyst with China Venture, a research and consulting institute, said yesterday.

"It was helpful for small- and medium-sized logistics firms who lack the enormous capital strength and customer sources (to succeed in this part of the industry)," Feng said.

China's logistics market is fragmented, and their services need to be improved, Xu Shouzhen, deputy director with the Logistics Association of China, told the Global Times yesterday.

Currently there are some 600,000 registered delivery firms in China, yet only several thousand of those firms are actively conducting business.