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China's Shipping Challenge Creates Opportunities For Alibaba And China's Logistics Companies

There's an old saying that supposedly in Chinese the word crisis comprises the symbols for danger and opportunity. While that saying is actually a myth, it very much applies to the situation China finds itself in with respect to its massively growing ecommerce industry and how goods get shipped from the manufacturer to the consumer. Much of the country's infrastructure is at capacity or is non-existent in rural areas, which makes it difficult to ship items to people who live in such places. Alibaba Group Holding Limited (BABA) has taken a proactive approach in setting up its own logistics systems through China Smart Logistics, a Joint Venture 48% owned by the company. In addition to ensuring an efficient and reliable process for BABA's growing ecommerce business, I believe investors also will be able to benefit from a significant trickle-down effect on third party logistics providers and infrastructure development.

Referring to… Read More …