Ethiopian Airlines launches e-commerce logistics hub to serve Alibaba, Shein

Photo credit: Ethiopian Airlines

Ethiopian Airlines Group has launched a new e-commerce logistics facility in Addis Ababa that will process items for the Chinese online trade giants Alibaba and Shein.

The US$55m complex, built by Chinese construction company Avic International, is dedicated to e-commerce, mail, and courier logistics services. It aims to bridge logistical gaps and position Addis Ababa as the cross-border e-commerce logistics hub for Africa and beyond. The facility, expected to process 150,000 tonnes of cargo annually, will offer a range of services including consolidation, deconsolidation, sortation, repacking, labelling and more. 

While Ethiopian Airlines previously transported e-commerce goods for Alibaba and Shein, it will now also sort and reaggregate these items at its new facility for further distribution across Africa. The carrier, with its hub in Addis Ababa, serves more than 150 domestic and international passenger and cargo destinations across five continents.

Shein, the Singapore-based Chinese fast-fashion retailer, has become a meaningful player in several African markets. Shoppers either use the Shein app directly or buy from local stores stocking its products. In South Africa, Shein's entry has rattled established retailers. Renowned for cut price offers and strategic use of social media marketing, Shein swiftly rose to become one of the most downloaded apps in the country on the Google Play Store. The firm entices consumers with its competitive pricing, modern designs, and quick delivery. Its offers are, more often than not, significantly cheaper than local competitors. Some resourceful South Africans are pooling orders to buy in bulk from Shein, seizing opportunities for lower shipping costs and volume discounts.

While Alibaba's commercial presence in Africa may be modest, the company is actively encouraging African entrepreneurs to both purchase and sell items on Alibaba.com. It has expanded its footprint on the continent through a variety of initiatives and partnerships. One such effort is the Electronic World Trade Platform, which has been established in Rwanda and Ethiopia. This initiative seeks to ease cross-border trade and provide small and medium-sized enterprises with the means to access global markets, including China. Moreover, Alibaba founder Jack Ma has initiated the Africa’s Business Heroes Prize Competition, which offers grant funding, training programmes, and support to entrepreneurs across the continent.

E-commerce is often heralded as Africa's next major growth industry, fuelled by the continent's large young population, increasing mobile internet access, and rising disposable incomes. The rate of e-commerce adoption in Africa is projected to surpass 500m users by 2025, a significant increase from just 139m in 2017. However, the industry faces several hurdles, including Africa's underdeveloped logistics infrastructure, high transportation and duty costs, unreliable postal services, and a distrust of online shopping, which has compelled many companies to offer cash on delivery options.

 

References

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‘China’s Jack Ma: An Africa strategy of connect and influence’, The Africa Report, 06 November 2020

‘Top opportunities for B2B trade and e-commerce in Africa’, Alibaba, 26 September 2022

‘Shein — loved by shoppers, hated by rivals — is under investigation in South Africa’, Rest of World, 22 March 2023

‘The growing pains of e-commerce business in Africa’, NTU-SBF Centre for African Studies, 28 March 2023

‘How Shein, the Singapore-based China-founded Asian retailer is outgunning Amazon and Walmart in South Africa’, South China Morning Post, 20 August 2023

‘Ethiopian inaugurates first of its kind e-commerce logistics facility at Bole International Airport’, Ethiopian Airlines, 29 February 2024

‘Ethiopian Airlines launches e commerce logistics hub’, CGTN Africa, 02 March 2024

‘Applications open for the sixth edition of Africa’s biggest entrepreneurial competition’, Africa’s Business Heroes, 04 March 2024

‘Introduction to eWTP’, Electronic World Trade Platform, Accessed 13 March 2023