Logistics company Cainiao’s recent decision to waive residential surcharges could potentially improve supply chain management in Hong Kong, according to economists. The move may facilitate global e-commerce by easing the process for mainland Chinese companies to export their products internationally.
Willy Lin Sun-mo, chairman of the Hong Kong Shippers’ Council, described Cainiao’s initiative as “radical,” especially considering the company’s establishment of a large warehouse at the city’s airport last year. Lin highlighted Cainiao’s proactive approach in promoting Hong Kong as its e-commerce base, indicating a strategic push for increased business opportunities.
Cainiao’s announcement of waiving residential surcharges for deliveries within the city, effective immediately, eliminates additional costs for door-to-door deliveries. The company’s 12-storey warehouse, Cainiao Smart Gateway, spanning 380,902 square meters, boasts state-of-the-art digital technology and commenced operations in October last year.
The proposal for Hong Kong to evolve into a supply chain center, particularly for medium-sized, export-focused businesses from both mainland China and overseas, was presented by business tycoon Victor Fung Kwok-king during a meeting with Chinese President Xi Jinping. Fung, chairman of the Fung Group, made the suggestion coinciding with Cainiao’s announcement of its residential surcharge waiver strategy.
Despite these advancements, challenges remain for Hong Kong to establish itself as a multinational supply chain management center. Willy Lin noted a deficiency in talent with expertise in global sourcing and compliance with international trade regulations. He attributed this shortfall partly to geopolitical tensions between the United States and China, which prompted manufacturing companies to relocate operations to Southeast Asian countries over the past five years to circumvent US restrictions.
Tang Hei-wai, an economics professor at the University of Hong Kong, emphasized the potential of Cainiao’s surcharge waiver to facilitate cross-border and digital trade between Hong Kong and mainland China, which he views as crucial for the city’s transition into a multinational supply chain management hub.
Billy Mak Sui-choi, an associate professor at Baptist University, suggested that Hong Kong’s global city status could position it as a significant testing base for mainland logistics firms seeking overseas expansion. He emphasized the potential of Cainiao’s expertise in optimizing online shopping and delivery operations in Hong Kong to bolster its international presence, potentially enabling faster product delivery for overseas buyers through platforms like Taobao.
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