In Malaysia's capital Kuala Lumpur's largest shopping mall, a leading Chinese toy brand store is bustling with crowds. Following the philosophy of "to get rich, build roads first," this toy company venturing overseas must ensure stable supply to local stores, which relies on flexible, stable, and efficient logistics support behind the scenes.

According to sources, this leading toy brand chose Cainiao as its logistics service provider in Malaysia. Near Kuala Lumpur, Cainiao operates its largest self-operated overseas warehouse in Southeast Asia, featuring a dedicated toy section with independent locks and security monitoring. "Many clients are now queuing to enter our warehouse," Bruce, Cainiao Global Supply Chain's Singapore & Malaysia Country Manager, revealed that brand overseas expansion clients' demand is shifting dramatically from cross-border direct mail to overseas warehouses. This robust demand has driven local business volume to grow several-fold since early this year.

This scene epitomizes the new battlefront in global logistics: as Chinese enterprises shift from "selling products" overseas to "brand localization," overseas warehouses capable of reducing logistics time from 10 days to next-day delivery have become strategically contested territories. In this land-grab competition, cross-border players like S.F. Express and J&T Express are engaged in close combat with international logistics giants, but Cainiao, originating from Alibaba, represents a more central force.

This smart logistics unicorn, while serving as "Alibaba's e-commerce backbone," has focused on "international" and "technology," committed to building a truly global and market-oriented logistics network. Cainiao's transformation represents a landmark event in China's logistics industry collectively "going overseas" to seek new growth poles. Against the backdrop of intense domestic market competition and limited growth space, international logistics accompanying the rise of cross-border e-commerce has become a "must-have option" for all leading players. As they accelerate the export of digital capabilities and "China speed" forged during China's e-commerce era, a competition dominated by Chinese logistics forces aimed at reshaping global supply chain service standards has officially begun.

**Guardian of Brand Overseas Expansion**

The new round of Chinese enterprise overseas expansion presents a significant characteristic: building global brands. An industry consensus is that "globalization means localization," making overseas warehouse selection an important measure for advancing localization.

Overseas warehouses refer to storage facilities in cross-border trade where multinational enterprises transport goods to target market countries through bulk shipping, establish or rent local warehouses for storing goods, and directly conduct sorting and shipping operations from warehouses based on local sales orders.

Cainiao's capabilities in overseas warehouse chains are comprehensive: from domestic customs clearance and sea freight to local warehousing and final delivery, forming a complete closed loop to help enterprises achieve overseas fulfillment. Bruce noted that establishing overseas warehouses in target markets significantly improves logistics efficiency, enabling same-day or next-day shipping after consumer orders, while cross-border direct mail requires at least several days or longer. For larger brands, the overseas warehouse model provides better customer experience with efficient and stable fulfillment supporting sales growth.

Cainiao's overseas warehouses multiply logistics time reduction. Previously, merchants stocking domestically and shipping to end destinations after customer orders, even by air freight, required 5-10 days to reach Germany. Now, by pre-stocking overseas warehouses, packages to Berlin can achieve next-day or two-day delivery after warehouse dispatch, matching local logistics efficiency. Cainiao's overseas warehouse 2-3 day delivery service covers most of Europe, America, and Asia-Pacific regions.

In essence, logistics service providers operating overseas warehouse businesses serve as guardians of enterprise brand overseas expansion. Bruce mentioned a Chinese snack store brand that first went overseas in early 2023, initially completely unfamiliar with customs clearance, warehousing, and delivery, not even knowing whether to choose self-operation or franchising. After understanding the company's needs, Cainiao provided comprehensive solutions based on Malaysian market knowledge and helped resolve customs clearance and delivery compliance issues. This snack store brand quickly opened stores in over 30 large Malaysian shopping malls with rapid business growth.

Overseas warehouses are important infrastructure for Cainiao's global supply chain business. Currently, Cainiao operates over 40 overseas warehouses across 18 countries and regions in Europe, North America, and Asia-Pacific. Notably, Cainiao's Asia-Pacific supply chain covers 10 core countries and regions including Singapore, Malaysia, Thailand, Indonesia, Philippines, Japan, and South Korea, providing local B2C and B2B warehousing and delivery services for global brands and Chinese overseas clients, making it the logistics company with the broadest Asia-Pacific warehousing and delivery network coverage in the industry.

**Land-Grab in Malaysia**

Recognizing Chinese overseas enterprises' strong demand for overseas warehouses, Cainiao responded quickly, accelerating overseas local warehousing network deployment over the past 2-3 years, with Malaysia, viewed as fertile ground for Chinese enterprise expansion, being a key battleground.

Bruce was dispatched by Cainiao Group to Malaysia in January this year to develop the market. He told sources that Cainiao operates its largest self-operated warehouse in Southeast Asia in Malaysia, with tens of thousands of square meters total area located near Kuala Lumpur with convenient transportation, connecting Port Klang and Kuala Lumpur's core areas, achieving 1-3 working days delivery in Peninsular Malaysia with final delivery covering all of Malaysia and Brunei.

This warehouse provides online and offline omnichannel distribution and inventory management services, serving Chinese overseas brands and local FMCG enterprises, with current clients including Alibaba's Lazada platform, leading domestic toy brands, apparel, beauty, and daily chemical brands and merchants.

Cainiao's smart logistics capabilities are also demonstrated in this Malaysian warehouse. The warehouse is equipped with intelligent storage, intelligent assembly lines, intelligent wave operations, spiral ladders, and other automation equipment, plus separate valuable goods areas with independent electronic locks and 24/7*365 camera monitoring to protect high-value products, efficiently ensuring goods safety in and out of warehouse within 48 hours. Bruce stated this warehouse's overall technical level leads in Southeast Asia.

"When I first arrived, only half the warehouse area was in use, now it's completely full with very robust client demand," Bruce revealed. Cainiao now operates three overseas warehouses in Malaysia, partly from taking over existing clients and partly from self-development, while overall business volume has grown multiple times, particularly with significant third-party client growth.

Cainiao's new clients partly come from other logistics service providers, while others are newly developed through local sales teams. "Currently many clients actively seek cooperation with us, especially Chinese brand overseas enterprises," Bruce said.

Due to massive market demand, Cainiao remains in rapid expansion phase in Malaysia with plans to develop more overseas warehouses. Cainiao has a dedicated warehouse selection team here with over ten years of related experience domestically and 2-3 years of Malaysian operations, with team size increasing annually.

Bruce noted Cainiao's competitors include local and international logistics enterprises, plus cross-border logistics players like S.F. Express and J&T Express, but Cainiao ranks in the first tier for Southeast Asian market competitiveness with manageable overall pressure.

Regarding Cainiao overseas warehouse competitive advantages in Malaysia, Bruce believes: first, Cainiao's high-quality services in China built good brand reputation; second, warehouse location advantages with Malaysian warehouses near transportation hubs, 20-30 minutes from city centers with high delivery efficiency; additionally, Cainiao built mature local teams ensuring comprehensive service processes and guaranteed timeliness and experience.

**Global Logistics Ambitions**

Overseas warehouses are just part of Cainiao's global smart logistics network. Under the vision of "global 72-hour delivery," Cainiao's development has entered the 3.0 stage, committed to building truly global, market-oriented logistics networks with business covering cross-border logistics, overseas local express, global supply chain, and logistics technology, with overseas warehouses classified under the global supply chain business segment.

Like Alibaba Group's mission, Cainiao aims to "make it easy to do business anywhere." Back in 2013, Cainiao was jointly established by Alibaba, Intime Group, together with Fosun, Fuchun Holdings, and the "Three Links and One Reach" companies, initially created to meet logistics service needs of buyers and sellers on Alibaba's e-commerce platforms, serving as a logistics information platform.

Therefore, first-stage Cainiao positioned itself as a platform-based logistics technology company with business more focused domestically. After entering 2018, Cainiao entered a new development stage, successively acquiring and integrating four delivery companies and two warehousing operation companies, engaging in direct logistics services and industrial transformation. In this stage, Cainiao deeply involved in physical logistics operations, establishing the prototype of a global logistics network.

This occurred because Cainiao discovered that after basically completing digital transformation, express logistics needed to further adapt to rapid e-commerce format changes, providing more innovative solutions. Therefore, based on digitalization, Cainiao increased industrial logistics operations.

In this stage, Cainiao's strength continuously grew, even gaining "independent flight" capability. According to Frost & Sullivan data, by 2022 parcel volume, Cainiao ranked as the world's leading cross-border e-commerce logistics enterprise and possessed the world's largest logistics network by geographic coverage. Simultaneously, according to Hurun Research Institute's "2023 Global Unicorn List," Cainiao ranked among global top ten unicorns with a valuation of 185 billion yuan.

Under intense domestic logistics industry competition and limited growth space, international logistics thriving alongside cross-border e-commerce represents the core for logistics enterprises to further expand market space. Against this backdrop, Cainiao also accelerated flight toward its third development stage.

At the 2023 Global Smart Logistics Summit, Alibaba Group emphasized that one important direction for Cainiao's future development is "focusing on global markets, building global logistics networks." That year, the milestone "Global 5-Day Delivery" product quickly launched.

Simultaneously, marketization became Cainiao's development "main theme." At last September's 2024 Global Smart Logistics Summit, Cainiao Group CEO Wan Lin clearly stated: "Cainiao will continue expanding global logistics backbone networks, serving both Alibaba e-commerce and open markets."

To meet cross-border e-commerce enterprises' efficient overseas expansion needs, Cainiao continuously invested, establishing end-to-end capable global smart logistics networks and possessing the world's largest cross-border logistics warehouse network.

After two years of internal reform and "convergence and focus," Cainiao's strategic direction has become increasingly clear, with "international logistics" and "technology" as two main threads. Future Cainiao aims not only to become a global logistics network promoter serving global merchants and brands but also to continuously invest in technology, exporting logistics technology capabilities globally.

Twelve years represent a major cycle. Previously serving primarily Alibaba, in the next twelve years, relying on "e-commerce" and "technology" DNA, Cainiao has potential to grow into a more market-oriented global logistics giant.