Cainiao Network, ("Cainiao"), the logistics arm of Alibaba Group, has announced that its new Cainiao P.A.T. Logistics Park in Long An, Vietnam will be ready for operation in the first half of 2022. The launch of the 110,000 square meters warehousing leasing space comes as the country sees a surge in demand for local goods and conversely, a growing need for warehousing facilities.
Located in Ben Luc District, Long An Province, the Cainiao P.A.T. Logistics Park is at the intersection between Ng Huu Tri, the 1A Highway and HCM-Trung Luong Highway. Its strategic location offers direct access to the country's key business hubs: the Mekong Delta, which accounts for 20 per cent of the global rice trade, and Ho Chi Minh City, Vietnam's economic center. With a variety of unit sizes spanning from 4,000 to 10,000 square meters, geographic positioning, and access to Cainiao's pioneering tracking service powered by technology, the logistics park provides efficient and cost-effective storage and shipping solutions for Vietnam's SMEs.
Vietnam is home to 800,000 enterprises, of which 97 per cent are small to medium-sized enterprises. With increased local and global demand for made-in-Vietnam goods and a thriving eCommerce market, SMEs across the country are experiencing a much-welcomed business boom. This translated to a surging demand for warehousing facility in Vietnam in recent years.
Today, this demand is further fuelled by logistics and supply chain disruptions, limited container shipping space and road congestions affecting truck transportation, causing many businesses to adapt their supply chain practices to focus on expanding and diversifying their inventories and warehouse space.
"At Cainiao, we are committed to supporting local businesses, particularly small and medium-sized enterprises, with an efficient and comprehensive logistics network that can lower trade barriers, allowing them to tap on overseas market opportunities and access a wider consumer base. The launch of Cainiao's logistics park in Long An is very timely and we believe it will play an instrumental role in mitigating supply chain disruptions by providing the most optimum warehousing facility to strengthen businesses' inventory management strategy," said Eric Xu, General Manager of Cainiao Smart Hub.
In tandem, trade is undergoing a structural shift from traditional sales channels to eCommerce platforms, which is a driving force for the shift to smarter logistics facilities and services. eCommerce companies require more space than brick-and-mortar retailers, as they operate with larger inventory levels and higher volumes of products, as well as needing additional space for returned goods. As a result, JLL Vietnam predicts warehouse demand will grow three times faster than the rate of eCommerce growth— leading to an increased need for efficient large-scale warehousing solutions like the Cainiao P.A.T. Logistics Park.