Behind the Deal: Why CP AXTRA (Makro-Lotus’s) is Co-Creating Retail Tech with Alibaba's Cainiao

Retail and wholesale giant CP AXTRA – operator of Makro and Lotus’s - is in the midst of a massive Retail Tech Transformation. Its chosen partner on this journey is Cainiao, the global leader in e-commerce logistics under Alibaba Group. 

This isn't just about installing new software. It's a strategic "co-creation" partnership designed to completely overhaul CP AXTRA’s backend systems and position the company as Southeast Asia’s leading retail tech platform.

What's behind this major decision, and how will the technology they’re developing together reshape the shopping experience at Makro and Lotus’s?

The Pain Point: Customers Won't Wait

Mr. Tanit Chearavanont, Group Chief Wholesale Business Officer at CP AXTRA, describes three major challenges facing the business: digital transformation, evolving customer behavior, and increasing supply chain complexity.

In the past, retail was just about sending goods from the warehouse to the branch, and that was it. Today, what customers demand is 'speed'.

Previously, we’d ship on Monday for a Tuesday or Wednesday arrival. Now, customers want it in 3 hours, and we believe that in the future, Thai customers will be like those in China—they’ll want it within 25 to 30 minutes,

- Mr. Tanit Chearavanont

As e-commerce sales have surged from 3% to 30% of the business, the legacy backend system simply couldn't keep up. Order fulfillment capacity was capped at 15,000 orders per day.

This challenge isn't just about speed and order volume. It also involves the unique complexity of Makro's B2B wholesale business.

Mr. Tirayu Songvetkasem, Chief Digital Officer at CP AXTRA, explained that Makro's challenge is even harder than typical retail. This is because its B2B orders are large (averaging 3,500-4,000 baht per bill) and staff must pick items in enormous stores (5,500 - 10,000 sq.m.) while other customers are shopping in the same aisles.

Why Cainiao?

When existing systems could no longer meet business demands, CP AXTRA began scouting global partners and ultimately selected Cainiao.

The key reasons were scale and concrete experience.

Born from Alibaba’s core e-commerce ecosystem, Cainiao has the capacity to manage a staggering 90 million orders per day, surging to 120 million on "Double Day" sales, such as 11.11. 

Its world-class AI and logistics technologies are backed by deep operational know-how in managing massive order volumes.

Choosing Cainiao also reflects a shift in the organization's mindset. Mr. Tanit explained that Thais traditionally relied on software from the West, like the US or the UK.

But he emphasized to his team, paraphrasing Deng Xiaoping, "It doesn't matter if a cat is black or white, as long as it catches mice." In this case, Cainiao was the best "cat" to solve CP AXTRA’s problem

This partnership has led to three core technologies already being implemented at Makro:

iWMS (In-store Warehouse Management System)

A system that transforms each branch into a small-scale warehouse for processing online orders. Previously, one employee could pick 5 orders; now, they can handle up to 12, increasing "Pick & Pack" efficiency by 140%.

TMS (Transport Management System)

An intelligent transport management system that coordinates over 4,000 delivery vehicles (up from 400), expanding fulfillment capacity from 15,000 to 100,000 orders per day.

AI-Powered Planogram

An AI system that optimizes shelf arrangements – not just for aesthetics but to ensure products are easy to find for both customers and "pickers" working against the clock.

Behind the Co-Creation: Engineers On-Site at Makro

In the first week of our agreement, Cainiao sent more than 30 engineers to work side-by-side with our team in our stores,” said Mr. Tirayu. “We developed it together... and within 3-4 months, we began testing the first phase.

Another fascinating aspect of this deal is the "co-creation" model. Mr. Thirayu explained that this wasn't about buying an off-the-shelf solution, because the challenges at Makro in Thailand are unique.

This method led to the co-development of both software and algorithms. CP AXTRA holds joint intellectual property rights, gaining world-class know-how and positioning itself as a co-developer, not just a user.

Cainiao, meanwhile, benefits from learning about the complex Thai wholesale market, especially its unique characteristics, such as customer preferences for face-to-face delivery and the need to reclaim certain types of packaging—a stark contrast to the "drop-off" delivery models common in China.

This partnership marks only the beginning. CP AXTRA has set a three-year goal to become the #1 retail tech platform in Asia.

There are plans to expand this co-developed technology model to its second-largest market, Malaysia, and the new market in the Philippines. The company also plans to deepen collaboration within the Alibaba ecosystem, including using AI models like Qwen for system development and bringing products to the Chinese market via Tmall Global.

All of this aligns with the CP Group's "3-Benefit Principle": delivering benefits to the country, the people (customers), and finally, the company. By adopting world-class technology in Thailand, CP AXTRA aims to elevate the entire national retail industry to the next level.