Alitrip set to leverage Alibaba’s prowess in the world of e-commerce
Be it for Alibaba’s massive traffic or data analysis expertise, Alitrip is looking beyond the model of a traditional OTA to have a bigger say in the overall consumer travel experience.
ChinaTravelNews, Ritesh Gupta - Selling travel isn’t just about product, content, distribution mix or sales strategy anymore. The battle has nudged ahead into a different zone altogether. It’s the world of data, analytics, and technology that is creating the buzz.
So be it for machine learning or predictive analytics etc., the so-called data-driven environment is playing its part strongly in travel shopping. As for being an ally of a digital user, today transactional platforms are talking about omni-channel strategy, and winning over the “micro-moments”. These are real-time, intent-driven moments, the ones that established entities likes of Google and Alibaba are trying to win over.
As a colossal-sized e-commerce organization, Alibaba Group asserts that this approach fits in well within a category like travel.
“Travel is about I want to know moments, I want to go moments, I want to do moments, and I want to buy moments,” says Sherri Wu, Chief Strategy Officer, Alitrip, a part of the Alibaba Group.
Value of data is not captured by GMV
The game of e-commerce isn’t just about GMV. The traffic that visits Alibaba’s platforms such as Taobao Marketplace and Tmall.com is a major source of online marketing revenue. As users browse for ideas or compare offers, the resulting data from such behavior is analyzed and used for all categories including travel. If we assess the active user base that Alibaba has in its armoury, with over 400 million Chinese consumers transacting on its platforms in 2015, getting closer to knowing the intent of consumers is a huge advantage. “When our customers come to the ecosystem, they already have the purchase intention and security of payment (via Alipay). That is why we want to make sure that we can provide a complete consumer travel experience to them when they visit us,” says Sherri.
Not only the group possesses a massive active user base, but it also facilitates transactions via Alipay. Also, Alitrip served around 100 million Chinese domestic and outbound travellers last year.
“We are using large data analysis behind the scene in order to truly understand them (mobile users), instead of relying on product managers or simple guessing. By tracking customers’ behavior, we understand what might be the best way to fit their needs. Also different customers have different needs, based on their past behavior, so we are trying to make sure any ads and push notifications will be more meaningful to them to increase the conversion,” said Sherri, referring to analysing the way a mobile app or mobile wallet is being used.
Being a “marketplace platform” for travel
When asked how Alitrip is different from Ctrip and Qunar, Sherri clarified that Alitrip is not a traditional OTA, like Ctrip or Qunar.
“We are a marketplace platform. In China, “marketplace” has over 90% of the e-commerce (pie) and Alibaba is the largest marketplace with over 80% of the market share. Alitrip has a similar model, which fits into Chinese consumer behavior very well. Also, this helps more merchants to get online when the Chinese travel industry still has relatively low online penetration,” she says. On a bigger scale, the group recently highlighted that it is contributing towards online penetration of retail in China. In its recently released quarterly results, it emerged that largely because of Alibaba online penetration of retail grew from 10.6% in 2014 to 12.9% last year.
As for the travel sector, Sherri says the key strategies for 2016 are globalization (to grow Chinese outbound travel market and attract more international travel players to join the Alitrip platform) and providing a one-stop customer experience by further integrating with the Alibaba Group ecosystem. “We want to continue to grow our Hotel of the Future (e. g. allowing a user to avail hotel accommodation without paying a deposit and to enjoy express check-out service) and Park of the Future (entry to theme parks, attractions etc. via mobile phones and ticket fee automatically getting deducted from the Alipay account) by utilizing our marketplace platform, big data and payment (Alipay) advantages,” she shared.
Leveraging the strength of Alibaba Group
It’s been only 15 months or so since Taobao Travel became independent business and brand Alitrip was introduced with web domain www.alitrip.com.
“Alitrip is a new kid in the Alibaba family, however, we definitely get great support and help from the group,” said Sherri. In the Alibaba family, the group has several online e-commerce platforms: Taobao Marketplace, Tmall.com, Juhuasuan (group buying in China), AliExpress, the first business Alibaba.com, 1688.com, and other supporting services including Ant Financial, online marketing platform Alimama and logistics.
“Also, with our digital entertainment and local services business, we are focusing on O2O to truly bring online and offline together,” she said.
With Ant Financial, Alitrip is banking on Alipay and Sesame Credit to improve its platform and bring innovation for the travel industry on the whole.
Sesame Credit is a scoring system that generates individual credit scores for consumers by tapping into Alibaba Group and Ant Financial’s vast online ecosystem and other personal credit information sources. Sherri shared that Sesame Scores, which range from 350 to 950 points, are calculated based on five factors – credit history, behavioral preference, fulfillment capability, personal attributes and social network. Alitrip has been incorporating Sesame Scores into its platform to help travel service providers assess their customers' trustworthiness and offer more convenient services to qualified customers.
Citing an example, Sherri referred to the introduction of the “Hotel of the Future” offering, for which Alitrip banked on leveraging AliCloud’s cloud computing, big data services, Alipay/Sesame Credit.
The hotel industry can also use AliCloud services to analyze business and customer data, enhancing their capabilities in marketing.
“We are introducing five fundamental advantages for the hotel business: trust, efficiency, marketing, loyalty and security. That is why we call it “Hotel of The Future”: we are challenging the existing model, innovating and bringing a new experience to customers; at the same time, we want to give the control back to hotels,” said Sherri.
Constant improvement in product
According to Sherri, Alitrip’s mobile booking rate has reached more than 70% since middle of 2015.
“Since most bookings are completed through mobile app today, we really have to achieve mobile first to keep our mobile experience consistent with that of desktop,” she says.
“Mobile-friendliness is definitely a challenge in any user experience design, not just for the travel sector. We constantly review customer feedback to refine our design. I would say even though the retail and travel sectors have some differences, Alibaba’s Tmall.com and other apps have given us some help as well. Of course, with the travel sector, there are specific challenges and we will come out with some new design changes in 2016,” explained Sherri.
And data continues to be a major driving factor in this regard too. In fact, data goes deep into the lives of consumers, and refining of product is an outcome of this, too.
Referring to a purposeful data analysis case study, Sherri mentioned that the group tracked some of its consumers when they were pregnant years ago.
“What kind of nutrition products they are buying; then after the babies are born, what kind of diapers they are purchasing. Years later, they have started to use our visa services to apply for and acquire more than one developed countries’ visa. Also, they are high-tier Tmall.com members. When we pushed recommendations on overseas study tours to those customers, the conversion rates are much higher than those of the other groups,” explained Sherri.
So by using its précise data analysis, the team is helping merchants to find the best customer group for their products.
Commenting on plans for ITB, Sherri said, "Globalization is one of Alitrip’s key strategic goals for 2016, so we value every opportunity to introduce ourselves to international industry players and also share our experience in China’s travel sector. Industry conferences like ITB Berlin provide us with a great platform to meet with many industry players and familiarize ourselves with new trends not just in terms of technology but also customer behavior. We see this as a great opportunity to learn from others and improve ourselves."