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Alibaba Signs New Deal with China Post
[November 24, 2006]

Alibaba Signs New Deal with China Post

(Comtex Business Via Thomson Dialog NewsEdge) SHENZHEN, Nov 24, 2006 (SinoCast China IT Watch via COMTEX) --Chinese e-commerce website, operator of Yahoo China, has teamed up with China Post to boost its offline logistic system and increase online payment users, the two parties announced on November 22.

The tie-up will help Alibaba to penetrate underdeveloped e- commerce regions like the rural areas using China Post's most extensive parcel delivery and money remittance network, said Jack Ma, founder and chairman of Alibaba.

"It's the most important strategic partnership we have ever entered since the establishment of Alibaba," said Ma at the signing ceremony of the long-term strategic partnership agreement in Beijing.

Previously, Group, operator of China's largest online market place and the country's biggest auction site, just recommended on its sites several privately run express delivery companies whose networks don't cover the whole country.

Traders complained about damages to and even losses of their goods during transport, for which they would only be compensated at most three times the delivery fee based on the express delivery companies' rules.

Ma said as one of China's most trusted brands, China Post will enhance traders' confidence in e-commerce and they have also worked out a mechanism to offer full compensation for traders in case of commodity damage and loss during transport.

Under the agreement, China Post and Alibaba's online payment tool Alipay will shortly launch a parcel service for online purchases at China Post's 66,000 branches nationwide, called e-Youbao, which will be 50 percent cheaper than the post office's common Express Mail Service, and similar to the price offered by privately run express delivery companies.

China Post's 140 million users of its Green Card debit service can also pay online through Alipay, like other bank cards whose issuers cooperate with Alibaba.

More than 250,000 deals a day were done through Alipay, but only 15,000 deals are completed through its recommended express delivery firms.

Most people believe that selling products or services online is so-called e-commerce. It is not necessarily true. This can only be regarded as e-trading. E-commerce includes more software and services. In theory, any business conducts based on internet or communication technologies such as R&D, manufacturing, procurement, sales, and after-sale services can be included in the range of e-commerce.

With the development of Internet, e-commerce covers far more areas than before. Supply chain including information exchange, order fulfillment, pre-sale and after-sale services, storage, e-payment, transportation and distribution, has also become part of the content of e-commerce. But enterprises engaged in e-commerce do not necessarily have a good platform or have ability to operate the platform. Therefore, it is an inevitable trend to outsource some businesses to professional e- commerce websites. It is predictable that in a few years, e-SCM will prevail in the area of e-commerce.

Alibaba's operation was divided into four parts, including Alibaba, Taobao, Alipay and Yahoo! China in the adjustment. After the adjustment, Jack Ma stepped down from the CEO of Taobao and Alipay and only stayed as CEO of Alibaba and Yahoo! China. The detailed operation of the four branches is in the charge of Alibaba's COO Li Qi.

The former distribution strategies will stay as before this year. Alibaba will continue with its direct-marketing means, while Yahoo! China and 3721 will go on with the distribution means, revealed Mr. Ma.

From China Telecom World, Page 1, Thursday, November 23, 2006
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