Singapore Airlines (SIA) and Alibaba Group this week announced a comprehensive strategic collaboration aimed at enhancing the customer experience for travelers. The collaboration encompasses several players in Alibaba Group’s ecosystem including Fliggy, Alibaba Cloud, Alipay and Cainiao Network.

The partnership extends across areas such as flight ticket sales, loyalty programs, marketing initiatives, cloud services, payments and logistics. SIA and Alibaba Group will gain actionable customer insights for the benefit of travelers in one of the world’s fastest growing travel markets.

The tie-up represents a significant extension of a partnership between SIA and Alibaba Group’s affiliate, Alipay, which was introduced as a payment option on SIA’s website in 2013. In 2016, an official SIA flagship store was also launched on what was then known as Alitrip (later rebranded “Fliggy”), Alibaba’s travel service platform, for direct purchase of SIA flight tickets by consumers in China.

Related: Insights of Starbucks and Alibaba’s strategic partnership

KrisFlyer and Fliggy will introduce two-way points conversion, allowing members to enjoy membership perks from both loyalty programs. KrisFlyer members will be able to convert their KrisFlyer miles to Fliggy points, and Fliggy members will be able to convert their Fliggy points to KrisFlyer miles. SIA and Fliggy also intend to explore further opportunities to sync their respective loyalty programs and to drive cross-promotion of membership services.

In addition, eligible Fliggy members at certain loyalty program tiers will be able to earn KrisFlyer Elite Silver or Gold status. Accompanying privileges could include tier bonuses on actual miles flown, priority reservation waitlist, seat selection privileges and priority baggage handling. Fliggy members who achieve KrisFlyer Elite Gold status can also receive benefits from the entire Star Alliance network, the world’s largest airline alliance.

The collaboration is also expected to cover the following areas:

• SIA and Alipay, the world’s largest mobile and online payment platform operated by Ant Financial, will work on extending Alipay acceptance beyond flight purchases to also cover in-flight products and services, airport services, retail merchandise and ancillary touchpoints.
• Together with Alibaba Cloud, the cloud computing arm of Alibaba Group, SIA will explore how its IT ecosystem – from web hosting to apps and membership systems – can benefit from Alibaba Cloud’s global network.
• SIA will work closely with Cainiao Network, the logistics arm of Alibaba Group, to enhance international air cargo services, joining Cainiao Network’s broader efforts in building a global smart logistics network that delivers across China within 24 hours and globally within 72 hours.

China online travel market insights Q1 2018, led by Ctrip, Qunar, and Fliggy

China Southern Airlines launched its WeChat account in early 2013 and set up a dedicated marketing team. More than 200 products have been on sales on its e-commerce channels. WeChat users could reserve and buy tickets of China Southern Airlines.

Direct sales of China Southern Airlines increased by 103.60% YoY as of December 31 2015. Mobile sales grew by 189.65% YoY and WeChat marketing sales rose by 195.00% YoY as of December 31 2015 and value-added services revenues grew by 102.44% YoY.

China Southern Airlines has two WeChat service official accounts with a total number of over eight million followers. The number of app downloads of China Southern Airlines reached nearly five million; and, visits of the e-commerce platforms increased by additional 85 million in 2015.

China Southern Airlines has opened online check-in services in 153 cities (119 domestic and 34 international) and more than 15 million person-trips have used the service with an increase of 32.04% YoY in 2015.

As one of the leading airline suppliers, China Southern Airlines has been a good example of good usage of e-commerce platforms and WeChat. With the popularization of social media and online shopping platforms it will be a good choice for companies to market themselves.

Also read: China Digital Consumer View 2015

Chinese tourists paid 7,934,700 person-trips visits to Thailand in 2015 with an annual increase of 91.62% which has set a new record according to Tourism Authority of Thailand.

Thailand is rich and diverse in culture and tourism resources and has been one of the most favorite outbound destinations of Chinese tourists. China was the largest travel origin of Thailand and over 4.6 million Chinese tourists traveled to Thailand in 2014.

The top three tourist origin countries of Thailand were China, Malaysia, and Japan with about 8 million, 3 million people, and 1.4 million person-trips in 2015. Foreign tourists visiting Thailand are expected to reach 1 million people during the Chinese Spring Festival in early Feb 2016 and nearly half of them come from China, Singapore, Malaysia and other countries.

Foreign tourist visiting Thailand in 2015 reached 29.88 million person-trips in 2015 and the number is expected to reach 32 million people with an annual increase of 7% according to Ministry of Tourism Authority of Thailand.

Thai Airways will launch flights from Kunming to Chiang Mai and the flight will serve 36,000 airline seats per month in 2016 according to Tourism Authority of Thailand. Chinese tourists visiting Thailand are expected to reach 8.2 million person-trips in 2016.

Also read: China Outbound Travelers Shopping Overview 2015

China online travel was a RMB307.79 billion (US$50.33 billion) market with an increase of 38.9% in 2014 according to iResearch. Online ticket market, online hotel booking market and online vacation exceeded RMB193.07 billion (US$31.57 billion), RMB63.25 billion (US$10.34 billion) and RMB44.88 billion (US$7.33 billion) respectively in 2014.

China online ticket market is relatively mature in online travel market. According to iResearch’s data, online ticket booking market value in 2014 was RMB193.07 billion with an increase of 41.1%.

It is believed that there are two major reasons for online ticket’s rapid development in China:

1. Qunar, Alitrip and other online travel companies now provide various online ticket service.
2. Airlines now promote their official websites to provide attractive price for travelers.

Also read: China Rural Travel Exceeded 1.2 Bln Person-trips in 2014

According to Hurun Chinese Luxury Consumer Survey 2015, Chinese luxury travelers on average go on business trip for eight days a month and the super rich are away for 11 days a month. And they also take 8 and 12 days of holiday respectively, one more than last year.

Chinese New Year is preferred time to travel, followed by October Golden Week and the summer holidays. The Peninsula Hotel replaced the Shangri-La as China’s preferred hotel brand; the Mandarin Oriental improved the fastest, rising to second place. Aman Resorts is named Best Luxury Boutique Hotel Brand in Hurun Best of the Best Awards 2015.

Australia is the top luxury travel destination, followed by France. Maldives shoots into third place. UK back into the Top 10.

↑ ranked higher than last year ↓ ranked lower than last year   * New entry this year

The same survey also unveiled that in China gift-giving market, travel gift vouchers continued to show a strong rise for the third year. Travel retail continues to change the dynamics of luxury in China, with 7 out of 10 luxury goods bought by Chinese now being bought overseas.

Read more: 74% Chinese Rural Residents Willing to Travel in 2014

Qunar’s total revenues for Q3 2014 more than doubled YoY to US$81.6 million and its mobile revenues was US$33 million an increase of 445.1% YoY.

Qunar’s total revenues for the third quarter of 2014 were RMB501.1 million (US$81.6 million), an increase of 107.8% year-on-year. Mobile revenues for the third quarter of 2014 were RMB202.7 million (US$33.0 million), an increase of 445.1% year-on-year, representing 40.4% of total revenues, compared to 15.4% in the corresponding period of 2013. Pay-for-performance (“P4P”) revenues for the third quarter of 2014 were RMB476.4 million (US$77.6 million), an increase of 119.3% year-on-year and 25.8% quarter-on-quarter.

Qunar’s total Estimated Flight Ticket volume (TEFT) and Total Estimated Hotel Room-night volume (TEHR) for the third quarter of 2014 were 22.7 million and 10.0 million, respectively, an increase of 57.0% and 84.6% year-on-year.

Hotel network direct sales contributed 51% of Qunar’s total hotel volume for the third quarter in 2014. Mobile continued to be a key driver of the growth, accounting for 40% of total revenue, 55% of TEHR, and 43% of TEFT.

For the fourth quarter of 2014, Qunar expects year-on-year revenue growth in the range of 90% to 95%.

Find out Ctrip and eLong’s Q3 performance here and here.

Also read: Guest Satisfaction Research of China Hotels

Boeing projects a demand in China for 6,020 new airplanes over the next 20 years, valued at $870 billion.

The company released its annual China Current Market Outlook (CMO)  in Beijing which shows Chinese carriers will take delivery of nearly 45% of the total demand for airplanes in the Asia Pacific region during the forecast period.

Tourism in China and intra-Asia travel support a strong demand for single-aisle airplanes, with total deliveries reaching 4,340 through 2033.

Chinese airlines with large global networks continue to look for opportunities to expand as international flying increases from tier-2 cities apart from Beijing, Shanghai and Guangzhou. This growth in the long-haul segment is expected to result in demand for an additional 1,480 new fuel-efficient widebodies, such as the 777, 787 Dreamliner and 747-8 Intercontinental. This year’s forecast reflects a continued shift in demand from very large airplanes to efficient new small and medium widebody airplanes.

Worldwide, Boeing projects investments of $5.2 trillion for 36,770 new commercial airplanes to be delivered during the next 20 years. China accounts for more than 16% of the total demand in terms of both new deliveries and market value.

More than 50 percent of all the commercial jetliners operating in China are Boeing airplanes. Some 8,000 Boeing airplanes fly throughout the world with integrated China-built parts and assemblies. China has a component role on every current Boeing commercial airplane model – the Next-Generation 737, 747, 767, 777, as well as the world’s newest and most innovative airplane, the 787 Dreamliner.

Read more: Understanding Chinese Luxury Travelers

Source: Boeing

CIC and GroupM jointly released China social travel white paper in 2013. By collecting and analyzing social media discussion and related information, they classified Chinese travelers into five categories which could be helpful for brands to make market strategies.

China National Tourism Administration estimated that Chinese tourism industry would reach 2.9 trillion yuan (USD 471.4 billion). Travel became the hot topic in social networks, and social networks played an important part in travel plan making.

This white paper was based on Sina Weibo. CIC and groupm analyzed 2.96 million posts about travel and more than 10 thousand travel lovers’ Weibo posts. They classified Chinese travelers into five categories in the order of online discussion participation from low to high: business travelers, self drive travelers, group travelers, luxury shopping travelers, backpackers.

Hotels and transportation were the major topics of business travelers. In contrast of talking about five star hotels, they talked more about economic hotels. They cared about the service and location of the hotel. When considering about airlines, they preferred the one with meals and punctuality. One suggestion for marketers is when put out an ad, try to show your real product and service and avoid exaggeration.

Self drive travelers are usually big fan of cars. Except for talking about auto club activities, they would also discussed about car renting and maintenance. They preferred to get information from car dealers. Data showed that the self drive travelers’ discussions were motivated by making friends, enjoying freedom and spending time with family. For advertisers, they could achieve unexpected effects highlighting freedom and family time.

Group travelers loved to share information about travel agencies and their photos. Group travel was more likely to be affected by social news and social media discussions. Advertisers should combine their characteristics with social events.

Luxury shopping travelers loved show off their stuff on social networks. Leather products and haute couture were the favorite topics. They usually got their information from Taobao sellers and social shopping platforms. One way to stimulate their consumption is to make your brand special and unique.

Backpackers loved to share their experience on social networks more than the other four categories. They loved talking about Yunan and Hunan provinces, outdoor equipment and camera. They cared about the world and freedom, if brands could embody these elements in ads, they would attract backpackers.

What advantages exited for China airlines? What opportunities lie forward? What actions should be taken to reshape the Europe-to-Asia route? You would find the answers to those questions in this article.

Cost advantage of China’s Airlines

The cost advantage of China airlines enables them to be competitive among other international airlines. The low cost base is 10 to 20 percent lower than other Asian airlines and 30 to 40 percent lower than international legacy carriers. Meanwhile, the low labor rates, modern fleet and low fares continue to strengthen this predominance.

Growing Consumer Base From Travel Sector

Based on another study by the BCG Group, Chinese travelers will take 2.5 billion trips and spend approximately $850 billion by 2020. Going beyond the borders will generally become an essential part of Chinese travelling. More outgoing passengers forecast more trips in and out of China. It is estimated that Chinese carriers will account for 6% global capacity.

Chinese Traveler’s Preference

There are 2 preferences of Chinese travelers to be notices. One is the purchasing tendency. Chinese travelers are more likely to go shopping when going abroad. The other one is about their information source. They will turn to the internet for all information, including ticket promotions, package tours.

Guidelines For Airlines Out of China

Given the threat from China airlines and the opportunity of reshaping the route, here are some suggestions from BCG for action.

1. Join forces in the industry to diversify the offerings and lower cost
2. Realize the brand loyalty by targeting at specific groups and quality improvement of service
3. Explore ways to build win-win situation with Chinese carriers

Source: The Big Squeeze: How China’s Emerging Airlines Will Change The Industry by BCG