China's State Post Bureau (SPB) will provide delivery services and on-line payment support to e-commerce giant Alibaba.com.
Under a framework agreement, the express mail service (EMS) under China's largest deliverer, would be recommended by Alibaba's on-line payment platform Alipay to its customers.
Alibaba president Ma Yun said the cooperation would help solve the problem of delivery that bottlenecks the country's burgeoning e-commerce.
Most commodities traded on-line in China are delivered by regular mail, small and medium-sized express companies or standard EMS services, which are either too slow or too costly, especially for long-distance deals.
The SPB will develop a special EMS service, 40 percent cheaper than the standard service, for on-line traders at Taobao.com, an Alibaba subsidiary and the country's most popular consumer-to-consumer marketplace, said director Yuan Guoli of the SPB's delivery bureau, without revealing details.
The "special EMS service" will be piloted in Hangzhou, capital of the southern Zhejiang Province, at the end of the year, before being expanded to nationwide next year.
Industry insiders say the strategic partnership could reduce the costs of delivery through large-scale negotiation, and prevent e-commerce fraud as the EMS would check the delivered commodities.
Meanwhile, on-line buyers can remit the payments through post bureaus to their Alipay accounts instead of solely relying on bank cards as they do now, according to the agreement.
The agreement follows moves by the SPB to set up an on-line bookstore and philatelic center at Taobao.com, and a simultaneous issue of greeting cards and special stamps for the New Year on the website and at the bureau's outlets on Nov.1.
Founded in 2003 with an investment of 450 million yuan (56.25 million U.S. dollars), Taobao.com has six million registered users.
By June 30, about a quarter of China's 123 million Internet users were regularly engaged in on-line shopping, 50 percent more than the same time last year, according to the China Internet Network Information Center.