Cainiao Network Technology Co Ltd, the logistics arm of Alibaba Group Holding Ltd, announced on Wednesday it will construct a world-class digital logistics center at Hong Kong International Airport.

With an estimated investment of $1.5 billion, Cainiao will lead the project through its controlling joint venture with China National Aviation Corporation (Group) Ltd and YTO Express, the company said.

Featuring automated warehousing and temperature-control solutions, the center will be put into operation in 2023 with an estimated gross floor area of 380,000 square meters. It will include an air cargo processing center, sorting center and order fulfillment center, among other functions.

The center will handle tens of millions of parcels every year to meet the surging cross-border e-commerce needs of global small and medium-sized enterprises, bringing an incremental cargo volume of approximately 1.7 million tons per year to one of the world's business cargo airports, once the center operates in full capacity.

The move forms part of Cainiao's broader effort to expand and strengthen its global logistics network. Just last week, Cainiao unveiled plans to open five hubs in five cities around the world – Dubai, Hangzhou, Kuala Lumpur, Liège in Belgium and Moscow.

The new Hong Kong hub will mark another enhancement to this network. It is also part of Alibaba's commitment to invest more than 100 billion yuan in an efficient smart logistics network that drives 24-hour delivery in China and 72-hour delivery to the rest of the world.