This is an article by Ritesh Gupta for TravelDaily China.It appears as part of the tnooz sponsored content initiative.
Mobile devices have become the 24/7 consumer companion and groups such Alibaba are taking advantage of all it can offer.
To comprehend how travel brands can get closer to their shoppers, a good place to start might be how Alibaba is simplifying lives via smartphone.
A mobile phone isn't just for shopping. It is about living better - taking care of mundane tasks, curiosity around new and exciting things, being playful, paying bills and more.
And that's where Alibaba chips in. By eradicating the boundaries between the offline and online world as part of the New Retail strategy, and letting consumers indulge in things they haven't done before - all via a mobile device - Alibaba is ensuring it is going deeper into the lives of nearly 620million mobile monthly active users on its China retail marketplaces.
Imagine these scenarios - scanning a travel merchant's logo at the airport for an interactive game or redeeming a coupon, buying something that a model is wearing during a live fashion show just by swiping a finger on the mobile screen, opening the lock of a bike hired via an app etc. All of this maintains the stickiness of an ecosystem.
"All of this means Alibaba is becoming an integral part of the lifestyle of consumers," says Wells Zheng, vice president, strategic development for transportation business, Fliggy.
The Hangzhou-based group asserts that it is counting on its media matrix and data for being relevant to shoppers and ensuring they spend maximum time on avenues such as Taobao, Tmall, Youku, Koubei etc. Alibaba is constantly shaping new experiences so users won't venture out of the ecosystem.
"Data that we have isn't only travel-related but also about other spheres of life.
"The link between all of the initiatives is data, backed by technology. As consumers use Alibaba regularly in a day's span, the company is garnering details on their shopping habits, evaluating payment and credit histories, search preferences, Internet interests etc."
Alibaba is clear that there are two rules implemented to ensure users' information security, Zheng explains:
"Only AI or the machine learning programs have access to the big data, no human is authorized to read any unencrypted user information. And the data will be solely used for intelligent recommendations with no other purposes without user's consent.
"In short, Alibaba ensures the security of users’ information. It is extremely important."
He mentions that convenience is one key aspect that ensures Alibaba is going deeper into the travel booking funnel.
For instance, Alibaba's technology could be facilitating its users' next visa application (Alibaba's travel service platform Fliggy is offering access to 11 Belt-and-Road countries that currently offer e-visas to Chinese citizens) or letting them book a hotel without pay anything up front or even after the check-out, and letting them check-in - all via Alibaba's app and consumer technology.
In a recent deal, Fliggy and the Tourism Authority of Thailand chose to work together to offer smart technological experiences at many facilities and tourist attractions across Thailand for the convenience of Chinese visitors - ranging from online tour guides to electronic ticketing systems. The option of tourist tax refund via Alipay system is also being looked at.
Zheng also refers to hotels in China featuring Tmall Genie, a smart voice-controlled speaker like Google Home or Amazon Echo, in guests' room for service, automating commands given by guests in the room etc. The fact Genie supports local language and can work in conjunction with other Alibaba offerings gives it an edge.
Exposure to travel via Fliggy
Zheng explains that Fliggy is just one tap away whether a user is using the Taobao app or the Alipay app or any app owned by Alibaba. He says:
"Say a Taobao user intends to buy an air ticket, they don't need to go out of the ecosystem. Buying a ticket is convenient as there is no need to log in again. Travel as an entry point is almost as seamless as Fliggy is right there. Often the travel industry talks about low frequency but this way the probability of the next buy goes up (users looking at Fliggy on a daily basis)."
Other than travel being present in one user interface (say Taobao or Alipay), another interesting aspect is how data can trigger a travel-related transaction. Zheng says:
"There are labels related to gender, geographic location and various shopping preferences to allow for segmentation, we offer personas and travel merchants can use the same for ad targeting. For example, if one customer buys diaper and the other one buys a school kit, this information is fed into our database. So if an airline intends to target a young family, our data engine would filter the database and offer airline a potential basket of 500,000 users who would be most likely to buy a promotion or an offer."
Among the major developments that the group has worked on in the past few months includes an online dashboard that shows brands how many consumers are interested in their products and where they are in that product lifecycle. Accordingly, brands can run campaigns as per the activity of users on their respective storefronts.
"Our platform isn't just about sales for travel brands, but also has a role to play in marketing and service," he adds.
"For this, brands can leverage Brand Account management and Marketing Services. These are an integral part of the Online Travel Marketplace (OTM), which marks the latest phase in the evolution of the tourism business model."
As for why the OTM model is best suited for travel merchants, Zheng explains:
"If we assess various models, starting with the meta-search, it isn't an apt user experience since a user is being directed to a different environment post comparison of offers. There is a risk in losing out a user before the conversion takes place. With OTAs, a user can complete a booking within the same environment. So users don't need to leave the OTA environment and the transaction is completed within the OTA interface. But OTAs block the connection between the supplier and travelers. Supplier hardly gets details about the customers' post booking.
"Under the OTP (Online Travel Platform) or the platform model, there is a connection between merchants and consumers but it is sales-oriented. The seller receives traffic "passively" since they don't have tools to showcase their content or manage their storefront.
“But under the OTM or the ecosystem model, Fliggy enables travel merchants to control the content, show price range etc. Booking takes place within the Fliggy environment and the ecosystem offers solutions for merchants to directly approach their customers. So overall, travel merchants can capitalize on the massive traffic/ the user base, and count on the ecosystem's big data capabilities and the ability to use big data to do marketing accurately etc. via Fliggy."
Zheng points out that Fliggy facilitates payment via Alipay to close the transaction, but there are other areas such as brand account management that would be a critical area for engaging travelers better.
"One can nurture a fan base, there is a service link for frequent flyers of airlines, live broadcast for targeting new traffic (for instance, destination, route and product information)."
A user could be shown features of a new aircraft via live streaming and if they show interest, they could be retargeted via advertisements on Fliggy or Taobao.
The team at Fliggy has just introduced a feature that enables an augmented reality scan of any brand logo via the Fliggy app to bring a user into a digital world from the offline one. Zheng says:
"A customer can use any logo of the brand anywhere and brands need to plan how to engage once their logo is scanned. This is a prime example of Alibaba as an ecosystem nurturing certain habits and capitalizing on them (building further on the scanning of QR Code, which is quite common), and in a fun-oriented manner consumers are being taken to the promotion landing page or offering free tickets, coupons, etc. depending upon the objective of the company.
The right recommendations
One way to take complexity out of travel planning is to come up with recommendations that connect with travelers.
It is fascinating to assess how Alibaba is capitalizing on machine learning by training data around their massive user base. Zheng acknowledges that recommendations (notifications or suggestions to meet a merchant's objective or even Fliggy sending the same on their own for destination discovery, travel deals etc.) or inspiring a new trip via content (and monetizing the same via tours, activities etc.) are going to become contextually stronger in the future. For instance, if a user buys a winter jacket and skiing equipment on an Alibaba-owned marketplace, would the same user be offered a winter holiday package in a ski destination?
"We are working on that. With every click and sessions within our ecosystem, we are sure the unique profiles of users will continue to get refined and soon this would be a possibility."