Southeast Asian retail giant eyes Cainiao

Author | Huang Yu Editor | Wang Xiaojuan The top-tier logistics technology spawned by China’s "Double Eleven" surge is accelerating its spillover, becoming an important driving force in the global digital transformation and upgrade of logistics and warehousing. Cainiao, which has taken "globalization" and "technology" as its two main development directions, established an independent logistics technology business unit about three or four years ago to speed up the expansion of external business. Today, Cainiao’s logistics technology business has made breakthroughs, securing a string of major international orders, with Southeast Asian retail giant CP AXTRA among its clients. Since the pandemic, e-commerce has boomed in Southeast Asia, and supermarket retail consumption is likewise accelerating its move online. As the largest retail company under Thai conglomerate Charoen Pokphand Group (CP Group), CP AXTRA has chosen digital transformation and upgrading as a key development strategy, aiming to rapidly build an integrated online-offline development platform. However, more than two years ago, CP AXTRA faced numerous challenges in its transformation. The goal at that time was to deliver "fast, accurate, and high quality," but the first major problem was that delivery speed could not meet standards, so the team searched globally for a suitable supplier to provide system solutions. This procurement process attracted the world’s top service providers. CP AXTRA’s CEO of wholesale business, Xie Yuchen, recalled that the Thai market used to prefer using European and American software, but he believes "it doesn’t matter if the cat is black or white—as long as it catches mice, it’s a good cat," and ultimately decided to cooperate with Cainiao. With Cainiao’s support, CP AXTRA’s digital capabilities have greatly improved, driving the e-commerce business share from 3% two years ago to 30%. This is not only a breakthrough in CP AXTRA’s transformation, but also a benchmark example of Chinese logistics technology serving local giants overseas. For Cainiao, partnering with a Southeast Asian retail giant like CP AXTRA undoubtedly sets an important example for its expansion in the Southeast Asian market. At the same time, it marks Cainiao’s logistics technology business gaining a foothold overseas and becoming a new driver of future growth. **Making CP AXTRA a "Fast Fish"** CP AXTRA’s digital transformation and upgrade is a highly watched event in Thailand and the entire Southeast Asian retail market. As a retail company with 36 years of history, CP AXTRA operates several supermarket brands including Makro and Lotus’s, with more than 2,700 stores in 10 countries and annual revenue exceeding $15 billion. CP AXTRA’s digital transformation is driven by three core factors: the inevitability of digital transformation, rapid changes in customer needs, and the urgent need for supply chain upgrades. Xie Yuchen pointed out that retail used to simply mean moving goods from the warehouse to the store, but now customers demand greater speed—in the future, Thailand’s market may need to achieve "25-minute delivery" like China. Meanwhile, Xie Yuchen noted that in the past, big fish ate small fish, but now fast fish can eat every fish. Because of its massive scale, multi-country coverage, differing consumer habits in each region, and diverse business models across B2B, B2C, and O2O, CP AXTRA’s digital upgrade faces many challenges. Wallstreetcn learned that CP AXTRA launched its e-commerce business in December 2022, initially using its own or other third-party systems, but with unsatisfactory results. Less than a year later, it switched to Cainiao’s system for more efficient operations. Why choose to partner with Cainiao? For a company at a critical stage of transformation like CP AXTRA, this was a decision that required careful consideration. CP AXTRA’s Chief Digital Officer, Khun Tirayu Songvetkasem, told Wallstreetcn that online sales and in-store revenues are growing rapidly, and the goal is fast delivery, accurate timing, and high quality. After a selection process, CP AXTRA was impressed by Cainiao’s ability to handle massive orders during China’s "Double Eleven" shopping festival and decided to collaborate after multiple site visits. Furthermore, Bu Jiao, Cainiao’s Asia-Pacific Logistics Technology Director, shared with Wallstreetcn that Cainiao responded quickly—not by following traditional bid formats, but by dispatching numerous experts and engineers to co-create on-site, discussing what the customer really wanted instead of simply copying existing solutions. "This sincerity and effort were recognized by CP AXTRA, and they truly felt our respect for them," said Bu Jiao. Cainiao lived up to this trust. In the first week of cooperation, Cainiao sent a 30-person team to CP AXTRA’s Thailand operation, and the system was launched in just three months. Jointly developed by CP AXTRA and Cainiao, the iWMS (Picking and Packing System) greatly improved operational efficiency. After full adoption at Makro stores, picking and packing efficiency increased by 140%. Additionally, by integrating CP AXTRA’s 4,000-vehicle transport fleet with its Transport Management System (TMS), daily order delivery capacity increased from 15,000 to 100,000 orders. Currently, besides the already launched iWMS and TMS, the partners are implementing an AI-powered shelf display solution aimed at optimizing in-store product arrangement and inventory layout to boost visibility and accessibility for customers and pickers. These digital systems are accelerating CP AXTRA’s e-commerce business. Khun Tirayu Songvetkasem noted that moving forward, they hope to work with Cainiao to connect the entire chain from warehouse to store to end customer, raising overall efficiency to the next level. Even more imaginatively, this cooperation marks the beginning of broader collaboration between CP AXTRA and Alibaba Group. In the future, CP AXTRA may use Alibaba’s AI Qwen large model and will soon open a self-operated store on Tmall Global to make it easier for Chinese consumers to buy Thai products. **Logistics Technology Accelerates Global Expansion** The cooperation between CP AXTRA and Cainiao is a microcosm of Cainiao’s logistics technology’s accelerated internationalization. After two years of internal reform and "focus consolidation," Cainiao has entered its 3.0 phase, dedicated to building a truly global, marketized logistics network, covering cross-border logistics, local overseas delivery, global supply chain, and logistics technology. After three or four years of effort, Cainiao’s logistics technology business has gained traction and become one of Cainiao’s key investments. Jin Lingling, General Manager of Cainiao Strategic Cooperation, told Wallstreetcn that Cainiao separated logistics technology into an independent sector to develop third-party business, gaining a lot of recognition and insights into market demand and the differentiating advantages of Cainiao’s products, so now there’s heavier investment in developing this sector. Cainiao Logistics Technology’s products cover upper-storage/lower-picking intelligent solutions based on four-way shuttles, warehouse execution systems, OTWB systems, supply chain control towers, item-level QR coding and RFID delivery solutions, logistics robots, and more—many of which have already surpassed 100 million yuan in sales. Initially, Cainiao Logistics Technology focused mainly on domestic expansion but later started pushing into overseas markets. This year, Cainiao Logistics Technology accelerated its overseas expansion and upgraded its organizational structure into four major regions: Asia-Pacific (including Southeast Asia), Europe, the Americas, and the Middle East/Africa, while strengthening its deployment of personnel abroad and local recruitment to ensure project delivery. Cainiao’s delivery capabilities continue to improve: in fiscal year 2025 (ending March 31, 2025), more than 400 new global projects will be delivered, meaning Cainiao will accomplish in one year 40% of its three-year goal of 1,000 global technology project deliveries. Logistics technology has now become Cainiao’s fastest-growing business sector. Globally, the logistics technology market has maintained double-digit growth over the past five years. Cainiao VP and Logistics Technology Division General Manager Bi Jianghua revealed that in fiscal year 2025, Cainiao Logistics Technology will continue to see dual growth domestically and overseas, with growth rates far exceeding the industry average; overseas sales are up more than 150% year-on-year. Amid revenue growth, more meaningfully, Cainiao Logistics Technology has also secured a number of landmark international contracts, especially in Europe, Latin America, and Southeast Asia. Currently, Cainiao has delivered several large-scale automated sorting centers in places like Vietnam and Singapore for customers, including the largest automated sorting center in southern Vietnam for a national postal express company. A representative of this Vietnamese national postal express company told Wallstreetcn: "We started investing in automated sorting as early as 2018. Cainiao helped build our sixth center, which is the most advanced—more stable, more efficient, and able to handle increasingly frequent e-commerce promotions." Beyond the express industry, more opportunities lie in vertical industry digital transformation orders. Wallstreetcn learned that, in overseas markets, Cainiao has delivered item-level RFID solutions to a luxury brand’s stores, and in Toronto, Canada, provided a global FMCG giant with a full-scenario high-flexibility upper-storage/lower-picking solution. At the same time, Cainiao has upgraded partnerships with several leading multinational companies from China-only technology partners to global partners, helping accelerate automation and digitalization in global warehousing. To date, Cainiao Logistics Technology products have reached 27 countries and regions globally, with over 800 cooperation projects worldwide. Domestically, Cainiao’s logistics technology has already covered multiple industries such as express delivery, automotive, FMCG, and aviation ground services—this foundational capability helps Cainiao expand more efficiently overseas. Last year, the number of major clients served by Cainiao Logistics Technology grew 61% year-on-year and maintained high repeat business. Bi Jianghua believes that the future of the global logistics technology market remains full of potential. With the penetration of AI, logistics digitization is set for rapid growth over the next five years. Furthermore, Chinese logistics tech products have unique advantages in innovation and cost-effectiveness, with huge room for growth overseas. Unlike specialized equipment providers, Cainiao’s core advantage lies in its dual strengths: operations and R&D. Cainiao’s global logistics business means its tech products are highly practical and informed by real-world operations—what Bi Jianghua describes as a "unique offering" that greatly attracts clients. Emerging from Alibaba’s e-commerce ecosystem after 12 years of development, Cainiao has taken "global logistics" and "technology" as its two main focuses. In the future, Cainiao aims not only to become a promoter of the global logistics network, serving merchants and brands worldwide, but also to continuously enhance its technological edge and export logistics technology worldwide. Following "Made in China," "Chinese technology," including logistics technology, is now beginning to reshape the global digital infrastructure in a more fundamental way—and Cainiao has become a force that cannot be ignored. Risk warning and disclaimer The market involves risk. Investment must be cautious. This article does not constitute personal investment advice, nor does it take into account the unique investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article suit their own circumstances. Investment based on this article is at your own risk.