Alibaba sets out to grab a slice of China’s surging travel bookings

China’s online purchase powerhouse moves into the travel market
China’s online purchase powerhouse moves into the travel market
Image: Reuters/Stringer
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Alipay, the online payments unit of Chinese internet giant Alibaba, is teaming up with world airlines to let its 800 million account holders purchase flights without a credit card. The company’s deal with UATP (Universal Air Travel Plan), a private network run by airlines like  Air New Zealand, Delta, Aero Mexico, Qantas, and Japan Airlines, is designed to capture a slice of the China’s rapidly expanding travel sector, currently worth some 622 billion yuan ($102 billion).

Jingming Li, Chief Technology Officer for AliPay, told Quartz that Alibaba launched the partnership because they, “had noticed a great trend of our members traveling to popular destinations like San Francisco, Los Angeles, New York, London and Paris.”

Chinese tourists spent $103 billion in 2012, topping the U.S. and Germany, each of which spent around $84 billion on travel.The burgeoning Chinese middle and upper classes contributed to a total of 83 million outbound trips from China last year, but with credit cards relatively rare it isn’t always easy for them to book flights on foreign carriers.

Li said the Alipay-UATP deal “means all of a sudden that businesses in their network are able to have a huge Chinese market, just like that. It’s very natural for us to service them, even when they are abroad: when they buy a ticket, when they are booking hotels, we want them to be able to use what they are used to in China and that’s Alipay.”