Alibaba Group Holding Ltd (NYSE:BABA) is introduce a three-hour delivery service for healthcare products.
The Chinese ecommerce giant will introduce the service to five cities, thus emulating its rival JD.Com Inc (ADR) (NASDAQ:JD). Shanghai and Beijing will be among the five cities to benefit from the new service. However, the company has future plans to spread the service to other regions. Additionally more products beyond the healthcare bracket will be included in the service in the future.
In order to achieve this new project, Alibaba has to partner up with five pharmacy chains which sell their products on one of Alibaba’s websites, Tmall.com. The service which was dubbed “fast delivery,” or ‘Ji Su Da’ will bring the products closer to the shoppers looking to purchase these products.
One of Alibaba’s partners known as Cainiao also worked hand in hand with other logistics organizations to pick up and distribute the ordered products. So far, JD.com is Alibaba’s biggest competitor because it is pegged on strong relationships with logistics networks. The competitor service also ensures speedy delivery just like Amazon.
Regardless of the competition, Alibaba and its affiliates have put in a lot of efforts in building up a strong Cainiao network over the years. Fast Delivery is one of the online company’s new ventures that involve bringing together online and offline services that co-interact with each other. A good example is the introduction of an online service that gives the user the ability to handle hotel details online before visiting the actual hotel.
Alibaba’s new product will particularly suit clients looking for a speedy delivery of non-prescription medicines and other healthcare products. One of the advantages of the new service is that it gives the company the opportunity to make use of its service on both the online and offline aspects.
In essence, Alibaba will be taking advantage of the growing technology front to increase its scope of operations. This will allow the company to improve its profit margins and also give the company more competitive edge.