Alibaba’s travel services unit wins endorsement from Malaysian prime minister

PUBLISHED : Friday, 04 November, 2016, 9:28pm
UPDATED : Friday, 04 November, 2016, 10:59pm

Alitravel, a holiday-booking unit owned by Alibaba Group, said on Friday that it will host a special tourism pavilion targeting Malaysia on its e-commerce platform to provide information and online bookings, amid growing interest among mainland Chinese holidaymakers in the Southeast Asian country.

The official launch took place at a hotel in Beijing attended by Malaysian Prime Minister Najib Razak and Alibaba Group executive chairman Jack Ma.

“Without Malaysia’s tin, China’s tea can’t find its way to Europe. Without China’s tea, Malaysia’s tin industry wouldn’t become the world’s largest in the 18th century,” Ma said. “Let’s turn the tea and tin of the past to the trade and trust of today.”

Malaysian tourism officials said the booking platform would provide tour and hotel packages, the option of airline bookings, as well as shopping vouchers and general tourism information.

“Alitrip provides an excellent platform for Malaysian travel trade players to get a bigger slice of the Chinese outbound market,” the officials said in a statement.

Alitrip has sought out official endorsements from regional neighbours to help bolster its image. The e-commerce platform faces stiff competition from rival mainland travel booking sites such as Ctrip, and Tuniu which have a higher market share and long standing relationships in the niche online travel agency market, analysts said.

In January, Alitrip unveiled a similar services package for Singapore during a launch event that highlighted cooperation with Singapore’s tourism authorities.

Alibaba this week celebrated the second anniversary of its travel division by offering online holiday packages to the UK, Finland, Italy, Switzerland, Czech Republic and the Netherlands.

“In a highly competitive market, Alitrip has to face up entrenched players such as Ctrip and The travel business is really a tiny part of Alibaba’s sprawling businesses, so it really depends on how much resources Alibaba would pour into this business,” said Michelle Ma, an internet industry analyst with Bloomberg Intelligence.

Li Shaohua, president of Alitrip, said the company, having already garnered about 200 million users, is leveraging a completely different business model than major online travel agencies. Instead of building its own travel resources like overseas travel agencies, hotels and airlines, Alitrip is more focused on “infrastructure building” that digitally connects agencies and tourists, much like Alibaba’s e-commerce site Tmall that connects brands and consumers.

“We have to send Chinese out first through tourism. Then they can spend locally and can use our other services such as Alipay,” Li said.

“Alibaba has huge online traffic. It is natural to leverage this to tap into various services. A little bit here and there. Alitrip, or the overseas travel industry it represents, is just one of them,” Ma said.

Chinese tourists are expected to be the largest group of travellers in the world this year, with 64 million people already crossing the country’s border during the first six months, according to data provided by the China Outbound Tourism Research Institute. In Malaysia for example, number of Chinese visitors grew 26.3 per cent year-on-year to 1.46 million in the first eight months. The two sides expect the number to hit 2 million this year and 8 million by 2020.

Alibaba is the owner of the South China Morning Post.