RADIO frequency identification (RFID) solution provider SMTrack Bhd is leveraging Cainiao, the official global parcel tracking platform of Alibaba Group which is the world’s largest e-commerce company, as a springboard to deliver e-commerce and express delivery to the international market.
Yesterday (Nov 17), SMTrack inked a partnership agreement with Cainiao (M) Sdn Bhd which acts as the Alibaba Group’s logistic arm to escalate the company’s venture into the cargo carriage business.
“Through our collaboration with Cainiao, we are optimistic that our venture into the cargo carriage business will help to speed up the group’s turnaround initiatives,” commented SMTrack’s deputy executive chairman Azmi Osman.
“Our diversification into the air freight services will provide us with a strong earnings visibility, driven by the high-volume growth of the industry.”
The partnership provides a perfect synergy between SMTrack’s expertise in RFID and Cainiao’s warehouse facility, according to Azmi.
This is important as Alibaba’s e-fulfilment hub at the Kuala Lumpur International Airport (KLIA) which is also known as Cainiao Aeropolis eWTP Hub is expected to see its cargo volume double to 1.4 million tonnes by 2029.
The eWTP Hub is envisioned to turn Malaysia into a major regional player for e-commerce distribution and a leading airfreight gateway in ASEAN.
Such ambition requires SMTrack’s RFID solutions that enable automation of manual processes in the warehouse and traceability feature that helps the supply chain to keep track of goods.
Under the terms of agreement, Cainiao will provide SMTrack with international freight forwarding services for international cargo transportation which is targeted at e-commerce and express delivery market.
Cainiao has established cargo hubs at Hangzhou, Dubai, Liege and Moscow airports as part of its strategy to provide e-commerce deliveries within 24 hours domestically and 72 hours internationally.
Its large network and smart logistic system will benefit SMTrack as the latter pushes forward with its cargo carriage business.
According to Mordor Intelligence, Malaysia’s e-commerce market which is currently worth US$4.3 bil is expected to double to US$8.1 bil by 2024, while the Malaysian freight and logistics market will reach more than US$55 bil by 2026 from US$37.6 bil in 2020.
At the beginning of 2021, SMTrack has purchased a passenger aircraft worth US$6.7 mil which was later converted the into a cargo plane. This is in sync with the group’s plan to expand its delivery of e-commerce and express delivery routes to include Kuala Lumpur to West Malaysia.
At the close of today’s trading, SMTrack was up 0.5 sen or 6.25% to 8.5 sen with 874,400 shares traded, thus valuing the company at RM39 mil. – Nov 17, 2021
