Alibaba Group and its partners today officially initiated the China Smart Logistic Network, or CSN, a logistics program aiming to support 30 billion yuan ($4.9 billion) worth of daily transactions in five to eight years. That’s 10.9 trillion yuan annually. In 2012, annual sales on Taobao and Tmall was over 1 trillion yuan.

CAINIAO

Logo of the newly established company, CAINIAO

A joint venture, called Cainiao, has been established together with top five logistics companies, Yintai (a department store chain who also runs an online store), Fosun(an investment firm) and Forchn(whose businesses include port logistics). Jack Ma, executive chairman and former CEO of Alibaba Group, is the chairman of the company and Shen Guojun, President of Yintai, is the CEO.

Alibaba is the biggest share holder, holding 43% of it with 2.15 billion yuan in investment, and Yintai takes 32%, as reported. Fosun and Forchn each take 10%; the five delivery companies each take 1%.

The first investment will be 100 billion yuan ($16 billion) and the second will be 200 billion yuan. As we reported before,  CSN will choose about eight places in China to be first-tier hubs and more satellite cities to be sub-hubs. It will open up to manufacturers, online retailers, delivery services and third-party service providers hoping to improve delivery efficiency with their contributions.

The daily parcels generated from Taobao and Tmall are over 12 million. At peak, on the annual promotion day, 11th Novermeber, 2012, the number was 72 million.