The logistics arm of e-commerce giant Alibaba Group has contracted with Suparna Airlines to operate daily dedicated cargo flights between Singapore and Hainan province in China to support Hainan’s emergence as a duty-free shopping hub and growing e-commerce orders.
The new air service is the latest example of how Cainiao Smart Logistics Network is rapidly expanding its private airline to quickly transport shipments for customers, much like Amazon Air (NASDAQ: AMZN) is doing in the U.S. and Europe.
Cainiao, which is building out its international supply chain and launching direct flights to many markets, said Monday that the charter flights from Singapore will deliver goods for the Hainan free trade zone. Five flights per week will arrive in Haikou, Hainan’s most populous city and located on the northern coast, with the other two arriving in Sanya, the southernmost city on Hainan Island. Outbound flights to Singapore will carry packages ordered online through the Alibaba website.
The direct air service from Singapore will significantly reduce delivery times, Cainiao said. Imported goods will reach China in three hours and be on store shelves within 12 hours compared to two or three days transit because the shipments were flown to Shenzhen or Guangzhou and then moved to Hainan by truck or ferry.
The Cainiao chartered flights from Singapore were instituted to address the big growth in demand for luxury brands in China, with consumption in Hainan increasing 244% since last July, compared to the same period last year, according to Chinese government figures.
In July, the Chinese government tripled the annual limit for duty-free purchases to $15,500 per person and removed a cap of about $7,500 for any single product as part of its free trade plan. In February, Hainan offshore duty-free sales shot up to $736 million from $568.5 million in January, according to the General Customs Administration of China.
China is also positioning Hainan as a strategic free trade port, with several port developments underway, including in the capital of Haikou. Cainiao said its direct flights will allow businesses to leverage Hainan’s position as a major duty-free shopping hub as well as its facilities for consolidation of component products being brought in for additional work and assembly from nations throughout the Asia-Pacific region.
“Hainan will be a pivotal priority for Caniao in the coming years, and we expect to open more direct cargo routes to link Japan, South Korea, Australia, New Zealand and Europe to Hainan soon,” said James Zhao, Cainiao’s general manager for global supply chain, in a statement.
Shanghai-based Suparna Airlines was previously known as Yangtze River Express but changed its name after launching passenger services in 2015. Alibaba officials said the company plans to expand the number of airfreight routes it operates between Hainan and other countries to increase the speed of cross-border trade.
In early March, Cainiao partnered with Saudia Cargo to operate five weekly flights from Hong Kong to Liege, Belgium, via Riyadh, forming a sky bridge linking Asia, Europe and the Middle East to cater to growing e-commerce demand.
The Middle East is one of the top five overseas markets for Cainiao, with shipment volume growing 20% year-on-year. The new flights will enable Middle East customers to receive their online orders from China in as fast as 10 days. The popular products among Middle Eastern customers are electronic goods, apparels and household products.
Saudia Cargo operates a fleet of Boeing 747 and 777 freighters.