Industry giants ink partnership deal

China's e-commerce giant Alibaba Group has entered a strategic cooperative agreement with Spring Group, the parent company of Spring Airlines and the largest budget carrier in the country, to jointly explore the burgeoning outbound tourism market comprised mainly of young Chinese travelers.

According to the agreement signed on Dec 28, the two groups will cooperate on multiple business aspects to expand their respective client bases — Alibaba has more than 400 million active users while Spring has around 24 million — including air tickets, destination businesses, membership and consumption points services, cloud computing and big data, as well as payment and credit services.

Li Shaohua, vice president of Alibaba Group and the president of its travel booking platform Fliggy, said that the partnership with Spring Group would aid Fliggy's ambitions of hitting 100 million passenger trips abroad. He also noted that as much as 83 percent of Fliggy's consumers are those born after 1985.

"The shared data will help Alibaba better understand consumers' needs and enhance services. Fliggy's goal of serving as many as 100 million passenger trips overseas by 2018 cannot be achieved by us alone. This is only possible when we cooperate with partners like Spring Group," said Li.

Wang Zhenghua, Spring Group chairman, said the deal would enable the airline to do more precise marketing by leveraging Alibaba's extensive database.

"Passengers aged between 20 and 35 are the major source of Spring Airlines' clients and this is the reason why 85 percent of the Shanghai-based carrier's direct air ticket sales comes from its website and smart phone application," explained Wang.

This is not the first time Spring Group has cooperated with Alibaba. A working relationship between the two companies was fostered nearly a decade ago when Spring became the first in the tourism and aviation industries to allow its customers to make payment via Alibaba's Alipay platform.

Spring Group first started out as a domestic travel agency in 1981 before launching Spring Airlines in 2004. To date, the group has diversified its business into tourism, aviation, hotel, exhibition, ticketing services, sports events, city sightseeing bus services and financial leasing.

"It is natural that these two companies are cooperating. Alibaba is always looking to attract corporations to tap into their big data and their expertise in information technology will greatly enhance the service, operation management and customer experience of Spring," said Li Lei, an industrial analyst with Minzu Securities.