Alibaba Group announced today it has launched its travelwebsite as an independent brand and business unit to tap China’s booming online tourism services market.
The website, Taobao Travel, is an online travel platform similar to Expedia, where Chinese users can search over 10,000 merchants selling airplane tickets, vacation packages, hotel rooms and tours. Formerly part Alibaba Group’s Taobao Marketplace, China’s top C2C shopping website, Taobao Travel from today will be known as Alitrip and have its own website address separate from Taobao.
The move to rebrand Alitrip, announced at a press conference in Beijing, comes as Alibaba Group is trying to increase its presence in China’s RMB 220.5 billion ($36 billion) online tourism market. Last month, Alibaba Group invested RMB 2.8 billion ($458 million) in Beijing Shiji Information Technology, a hotel software services and I.T. management consulting firm. By carving out Alitrip as a separate business unit, Alibaba Group is able to consolidate its marketing efforts and launch a cohesive strategy around the travel platform.
Alitrip’s core strategy will be to focus on mobile devices to enhance the user experience, create unique travel products and features, and increase the level of customer service in the industry.
“Traditionally, online travel businesses have always focused on the sales of travel products, while a large unmet demand for travel services remains,” said Li Shaohua, general manager of Alitrip, in a press release. “We aim to elevate the online travel sector to a higher level through Alitrip’s service offerings,” Li said.
Alitrip’s mobile application will offer users a host of services not yet seen in the mainland. For example, users who book flights through the platform can cancel or change their air tickets with just one click through the app. Currently, refunding an air ticket bought online can take weeks, but through Alitrip, refunds will be credited to a user’s Alipay account in an hour or less, Alitrip officials said. The app will also record your preferences and make selections, such as choosing an airplane seat for you, automatically when you book through the site.
Alipay, China’s largest e-payments provider, is an affiliate of Alibaba Group, which owns Alitrip.
Alitrip will also allow travelers to pay for their hotel rooms after their stay, streamlining the check-in and check-out process. Normally, online booking services require customers to pay for their rooms in advance, and hotels require customers to secure their rooms at check-in with deposits or credit cards. Alitrip users just need to return their hotel room card at check-out and charges will be debited directly from their Alipay accounts.
In addition, through Alitrip, Alipay users who reserve travel services using funds invested in a Yu’e Bao money market account will continue to earn interest until transactions are completed. The travel website will also create a RMB 100 million consumer-protection fund to reimburse dissatisfied customers.
Enhanced convenience is what Alitrip hopes will help it win in a crowded online travel industry dominated by rival Ctrip. In the second quarter of this year, gross merchandise value of online travel agencies rose 17 percent year-on-year to RMB 61.4 billion ($10 billion) with Ctrip capturing more than 50 percent of the market, according to technology consultancy iResearch.
“Improving service levels does not necessarily mean to put more customer-service people on the phone,” Shaohua said. “It means [changing] the traditional mode of service by means of technology.”
Hong Kong’s flagship air carrier Cathay Pacific and travel-booking website Agoda.com will join Alitrip, officials said. Cathay Pacific will take part in this year’s upcoming 11.11 Shopping Festival, Alibaba Group’s popular one-day online sale, by offering discounted flights to 20 Chinese cities as well as selected worldwide destinations.
