Digital dreams to reality: Creating a New Travel Retail

DAY 2

Chinese ecommerce giant Alibaba is on a mission to make it easy to do business anywhere in the digital era, including through the travel retail sector, as Alibaba Global Business Group President Angel Zhao outlined in a compelling presentation.

She introduced the concept of a New Travel Retail. In it, Alibaba wants to enable an industry upgrade through digitisation and enhancing the consumer shopping experience.

To do that, it will work with travel retail partners to link the online and offline worlds, leveraging mobile capabilities to connect merchants to consumers.

“We welcome more industry players to join forces with us and inject new ideas into the travel retail sector,” she said.

Zhao first highlighted Alibaba’s impressive journey so far; since its founding in 1999 it has grown to reach a gross merchandise volume of US$768 billion in 2018, and is expected to pass the US$1 trillion mark in 2020.

Discussing the New Travel Retail: Alibaba Global Business Group President Angel Zhao in conversation with Martin Moodie

She also emphasised the importance and impact of Alibaba’s Singles’ Day shopping event. Also known as 11.11, it is the world’s largest online shopping festival and generated a gross merchandise volume of US$30.8 billion last year. It is now a global event, Zhao said, with some 180,000 brands and 230 countries and regions participating.

And globalisation is indeed a key strategy for Alibaba. “We continue to develop technologies and capabilities,” she said. “An ecommerce platform by nature allows brands to sell globally. The goal of Alibaba’s globalisation strategy is to reach two billion consumers by FY2036, and it is based on principles of empowerment, inclusion and sustainability.”

That is where travel retail comes in, and the concept of a New Travel Retail. To enable the needed digital transformation, engaging the consumer is paramount, she said. Zhao highlighted four areas of digital empowerment: transaction, marketing, membership and service.

Alibaba’s ecosystem can support the travel retail business in this digital transformation, she said. It already has capabilities in the four areas noted, and launched its Fliggy Buy platform earlier this year.

Fliggy Buy is an online travel service platform that allows Chinese travellers to make purchases online at duty free and tax free shops, international retailers and speciality stores overseas – before they leave home.

Alibaba is at the forefront of the rapid growth of the digital economy. It is expected to pass the US$1 trillion mark in gross merchandise volume in 2020

Alibaba’s Singles’ Day shopping event generated a gross merchandise volume of US$30.8 billion in 2018 – with sales reaching US$38.4 billion this year

The company aims to reach two billion consumers globally by FY2036

Key principles are empowerment, inclusion and sustainability

Global FUN aims “to make it easy to do travel business anywhere”

Zhao introduced the concept of a New Travel Retail

A digitised membership programme supports engagement

The Alipay Mini Program is a one-stop smart airport solution

The platform, part of Alibaba’s Global FUN travel business, also gives Chinese consumers product information and reviews in their own language before reaching their destination and allows for the collection of products after arrival. “It is a single touchpoint to engage consumers throughout the whole customer journey,” Zhao said. There are opportunities for cross-campaigns at branded retail stores, for example, she explained.

We are also seeing more stores globally offering Alipay as a method of payment, and this makes travel more comfortable for Chinese passengers. Crucially, Alipay has evolved from a payment service to become a lifestyle service – and there are certainly lessons to be learnt from this transition.

The travel retail business can’t now go back to an offline-only model, and this is why the concept of a New Travel Retail is so relevant.

“Nothing will be able to replace the airport, but we can have a better consumer experience,” Zhao said. “As well as digital transactions and digital memberships, we can offer digital services such as smart shopping guides or tax refund services.” An app such as the Alipay Mini Program can be a one-stop solution for integrating all the customer’s needs at the airport, she noted.

Ultimately, Zhao said Alibaba’s goal was to bring more value to the consumer by working with partners and developing new solutions. After all, the aim of the Global FUN unit is “to make it easy to do travel business anywhere in the digital era”. “Let’s work together to enhance experiences and make Global FUN happen,” she concluded.

The Moodie Davitt eZine

Issue 271 | 19 November 2019

The Moodie Davitt eZine is published 20 times per year by The Moodie Davitt Report (Moodie International Ltd).


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