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Alibaba Partners Maersk for Online Booking of Cargo Space
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In its latest push into logistics, Alibaba Group Holding Limited (BABA - Free Report) has reportedly sealed a partnership with Maersk, a unit of Denmark's A.P. Moller-Maersk and the world’s biggest container shipping line, to offer online reservation of space on Maersk’s vessels. The service eliminates freight forwarders from the booking process and limits their services to haulage.
For the last one year, the stock has outperformed the Zacks Internet-Commerce industry. It has returned 15.11% compared with the industry’s return of 12.10%. The stock jumped 2.16% in yesterday’s trading.
Per a Reuters report yesterday, Maersk has commenced this service on Alibaba’s OneTouch booking website on Dec 22. As a part of the initial plan, OneTouch will offer advance booking of cargo spaces on selected routes from eight Chinese ports against a pre-paid deposit. The platform offers export services such as logistics and custom clearance and is the fastest growing part in Alibaba’s business-to-business division
The news also highlighted Maersk’s plans to initiate more pilot programs on third party portals as it aims at digitizing customer services.
Alibaba Steers Toward Logistics, Raises Game Against Amazon
The move underscores Alibaba’s growing interest in the global logistics business. The company has been exploring this space with investments in couriers and warehouses in the recent years. It has opened its own logistics service known as Alibaba Logistics.
Recent news from Reuters, Bloomberg and others show that Amazon’s (AMZN - Free Report) Chinese arm (Beijing Century Joyo, which it acquired some years back) has filed with the authorities as a handler of goods bound for ports in Japan, Europe and the U.S. In the U.S., it is registered as an ocean freight forwarder.
Amazon has been investing heavily in fulfillment centers, trucks and containers and its Fulfillment by Amazon (FBA) service has been doing well. It recently bought some planes and also has self-designed drones in the works.
However, since Alibaba does not hold its own inventory, it has more freedom compared with Amazon to invest in its own infrastructure that expands from logistics to payments.
The company is leaving no stone unturned to extend its e-commerce reach to mobile, video and distribution business with its eyes now set on China ships.
Our Take
Timeliness has become one of the most important factors in the e-commerce space. As competition intensifies, Alibaba needs to up its game. With the integration of its own logistics service platforms, Alibaba could build a solid logistics platform for small and medium-sized Chinese businesses.
Zacks Rank and Stocks to Consider
Currently, Alibaba is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) and Control4 Corporation , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for NVIDIA and Control4 have gone up by 30.6% and 2.3%, respectively.
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Alibaba Partners Maersk for Online Booking of Cargo Space
In its latest push into logistics, Alibaba Group Holding Limited (BABA - Free Report) has reportedly sealed a partnership with Maersk, a unit of Denmark's A.P. Moller-Maersk and the world’s biggest container shipping line, to offer online reservation of space on Maersk’s vessels. The service eliminates freight forwarders from the booking process and limits their services to haulage.
For the last one year, the stock has outperformed the Zacks Internet-Commerce industry. It has returned 15.11% compared with the industry’s return of 12.10%. The stock jumped 2.16% in yesterday’s trading.
Per a Reuters report yesterday, Maersk has commenced this service on Alibaba’s OneTouch booking website on Dec 22. As a part of the initial plan, OneTouch will offer advance booking of cargo spaces on selected routes from eight Chinese ports against a pre-paid deposit. The platform offers export services such as logistics and custom clearance and is the fastest growing part in Alibaba’s business-to-business division
The news also highlighted Maersk’s plans to initiate more pilot programs on third party portals as it aims at digitizing customer services.
Alibaba Steers Toward Logistics, Raises Game Against Amazon
The move underscores Alibaba’s growing interest in the global logistics business. The company has been exploring this space with investments in couriers and warehouses in the recent years. It has opened its own logistics service known as Alibaba Logistics.
Recent news from Reuters, Bloomberg and others show that Amazon’s (AMZN - Free Report) Chinese arm (Beijing Century Joyo, which it acquired some years back) has filed with the authorities as a handler of goods bound for ports in Japan, Europe and the U.S. In the U.S., it is registered as an ocean freight forwarder.
Amazon has been investing heavily in fulfillment centers, trucks and containers and its Fulfillment by Amazon (FBA) service has been doing well. It recently bought some planes and also has self-designed drones in the works.
However, since Alibaba does not hold its own inventory, it has more freedom compared with Amazon to invest in its own infrastructure that expands from logistics to payments.
ALIBABA GROUP EPS Diluted (TTM)
ALIBABA GROUP EPS Diluted (TTM) | ALIBABA GROUP Quote
The company is leaving no stone unturned to extend its e-commerce reach to mobile, video and distribution business with its eyes now set on China ships.
Our Take
Timeliness has become one of the most important factors in the e-commerce space. As competition intensifies, Alibaba needs to up its game. With the integration of its own logistics service platforms, Alibaba could build a solid logistics platform for small and medium-sized Chinese businesses.
Zacks Rank and Stocks to Consider
Currently, Alibaba is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) and Control4 Corporation , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for NVIDIA and Control4 have gone up by 30.6% and 2.3%, respectively.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>