A year on since she last spoke on the WiT Singapore stage in October 2018, much has changed in Cherry Huang’s life – from looking after Alipay cross-border payments for South-east Asia, she’s now the Head of Global Travel at Alibaba Group for the region, in charge of the development of both Alipay and Fliggy. Fliggy is an online travel service platform under Alibaba Group.
I asked her what this meant to her. Is the Alibaba ecosystem bringing travel together under one umbrella, and driving collaborations between Alipay, an in-destination app, and Fliggy, a pre-trip marketplace?
The answer is, yes – but only in the back end as the consumer interface and user experience will not change.
Huang explains, “Alipay as an in-destination app enjoys a high opening rate of 85-95%. Pre-trip is always more challenging for travellers because of limited information as travel is not a high frequency purchase. It makes sense to therefore bring pre-trip and in-destination offerings together, and even include the post-trip stage by extending our merchant solution to cover Tmall, Alibaba’s B2C e-commerce platform.
“On the other hand, retailers, hoteliers and restaurants are also in need to expand their consumer touchpoints to the pre-trip stage. How can they target travellers even before they arrive at the destination? Taking Charles & Keith as an example, many Chinese tourists become fans of the brand after making purchases at its stores in Singapore and continue shopping for its products through its official flagship store on Tmall.
“The collaborations between Alipay and Fliggy will offer a platform for merchants to discover travelers’ preferences and understand the entire customer journey, from pre-trip to in-destination and post-trip.”
She stressed that Alibaba is not building “the connected trip” consumer app like other travel brands. “We are not building a separate app, we will connect the three apps in a one-store concept and consumers can choose whichever app they prefer to buy from. At the same time, it allows us to uncover insights on that one connected platform.”
Huang said at the moment, its intention is to focus on the China market which is big enough.
“Our user base is huge in China – 900 million members on Alipay and more than 600 million annual active consumers on Alibaba’s China retail marketplaces, to which Fliggy has access. We’ll have to focus on China first and make it right.”
To drive the collaborations among platforms, a Global Travel team has been put in place with Huang responsible for South-east Asia.
Huang said both pre-trip and in-destination stages present their unique challenges. “When we first launched Alipay in the region, it wasn’t easy and we had to persuade merchants who had no idea of Alipay’s popularity to sign up. In pre-trip stage, the key is how to make the whole user experience more seamless and attractive; in the in-destination stage, it’s how to attract more people to use the app.”
When asked what Alibaba’s unfair advantage is when it comes to travel, she said, “Most of the travel apps have a low usage frequency, especially pre-trip. Alipay is a high usage app and enjoys high consumer mindshare and recall. If we combine this with the pre-trip stage, we can achieve higher usage frequency.
“Better synergy between the pre-trip and in-destination stages will provide us with better insights to create more unique and better travel experiences and products with merchants, and ultimately benefit consumers. We are using Alipay to strengthen Fliggy and Fliggy will help us pre-lock customers.”
By pre-locking, Huang means offering travellers pre-selling coupons for in-destination products and services, a new product it came up with after it stopped giving away free coupons. “They weren’t very effective. Because they are free, people don’t take them seriously. With pre-selling coupons, more people remember using them because they paid for it, and these coupons are driving people to these locations.
“People think about it when they have to pay.”
She said this was particularly true in Thailand where Alipay merchants have found between 60 and 80% of conversions on pre-selling coupons and the average spending of travelers has doubled. “A lot of merchants tell us they find this to be more cost-effective as compared to traditional CPM models. This is a true CPS model – they only pay when the customers have bought with their pre-selling coupons.”
In Singapore, an elevated model of this pre-selling coupon idea, which Alipay introduced under the “Passion Made Possible Program”, has been created as part of a collaboration between Singapore Tourism Board and Alibaba Group. Beyond coupons, this program provides a one-stop platform and pre-locks consumers by selling a variety of premium member privileges across Singapore. The latest result has shown that tourists using the program spend 3 times more than the average. Merchants participating in this program have also seen an increase in user spending.
Encouraged by the success of these programs, Alipay will introduce a credit system in which a consumer only needs to pay after the coupon is redeemed. If the consumer doesn’t use it after a purchase, Alipay will return the money.
“This lowers the barrier for pre-selling programs and encourages more consumers to buy.”
Huang was the first Chinese employee of Thomas Cook Group in Frankfurt between 2003 and 2005, where she worked in corporate development. Having just completed her MBA, she was quick to stress that the collaboration between Alipay and Fliggy does not mean “an integrated supply chain concept”.
Speaking of the tour operator group which collapsed last week, she said, “They are clearly an integrated tour operator – they owned flights, hotels and tours, they owned the value chain. We don’t. We are a tech company, a platform and an open ecosystem. It’s like Taobao – people create businesses on top of Taobao.”
“Being at the forefront of technology sometimes makes us lonely. The market may not fully understand us immediately. What keeps us going is our strong commitment to the mission of ‘making it easy to do business anywhere.’ Time and again, we insist on what we believe, and eventually prove ourselves to our partners and our users,” added Huang
This year is a pivotal moment for Alibaba – it marks the 20th anniversary since the company’s founding. In Alibaba, there is a saying “If not now, when? If not me, who?” That was exactly how Huang felt about the occasion.
“The past 20 years marked an era where the internet started and developed to make many things more fun and easier. The next 20 years will see globalization on a different level, where SMEs and individuals, rather than just big corporations, will start to benefit more. At this junction, I just want be a part this and there is so much to do.”