Travel retailer China Duty Free Group (CDFG) and Chinese multinational e-commerce conglomerate Alibaba Group have signed a memorandum of strategic cooperation.

The signing ceremony took place at Alibaba Group’s Hangzhou headquarters on 20 November. It was attended by Peng Hui, General Manager, China International Travel Service Co Ltd (CDFG’s parent company) and Zhang Yong, CEO, Alibaba Group.

Signing the cooperation agreement was Charles Chen, CDFG President and Zhao Ying, President of Alibaba’s Globalisation Division.

MUTUALLY BENEFICIAL PARTNERSHIP

Under the terms of the agreement, the two sides will establish a ‘long-term, stable and mutually beneficial partnership’ and create a tax-free cooperation through resource sharing and complementary offers. They have also vowed to create new models in retail and tourism shopping.

Through strategic cooperation, the two parties will build a new tourism retail ecosystem and enhance the duty and tax free shopping experience.

Speaking at the signing ceremony, Hui said the strategic cooperation was not only a strong alliance and marketing decision for resource sharing, but a strategic move to transform and upgrade the purchasing experience for tourists.

He added: “The signing of the strategic agreement fully demonstrates the desire and sincerity of mutual cooperation. I hope this will be an opportunity to further promote a deeper and higher level of cooperation with Alibaba.”

DEVELOPMENT DIRECTION

Meanwhile, CDFG’s Chen said many of Alibaba’s businesses aligned with the development direction of the company. He commented: “Duty Free shopping, a popular form of shopping in recent years, combined with Alibaba’s new retail scene, will usher in better development opportunities.

“Tax free business as a unique business segment in tourism retail will also become Alibaba’s ecosystem.”

Moving forward, both parties will strategically align in e-commerce, membership, big data and logistics. Chen said: “We will fully utilise the resource strength and industry status of both parties, deepen cooperation and promote industry progress and work together to create a new tax free experience for consumers.”

Alibaba Group’s Yong said that increased focus on service and technological development had prompted a switch in focus from price to value. He also pointed to an increased demand for upgraded travel experiences.

“Technology and commerce are being combined at an unprecedented rate. With the increasing popularity of outbound travel, duty-free shopping has become a popular form of shopping for tourists. Zhongnex Group is the largest tax-free operator in China.”

STRATEGIC COOPERATION

This strategic cooperation combines Alibaba’s digital capabilities with CDFG’s strengths as a travel retailer. This will enable both parties to explore opportunities around tourism and shopping and bring a new model of travel and shopping. It will also provide a platform for innovation and opportunities to improve the shopping experience.

According to the agreement, CDFG’s offline duty free store operation will combine with Alibaba’s Feizhu online travel platform and its third party online payment service to build a new tourism ecosystem. This will enable online and offline integration.

At the same time, both parties will cooperate on marketing initiaitves and open up their membership systems. This will enable joint online and offline promotion and collaborative marketing.

Additionally, Alibaba Group, through its cloud computing subsidiary, Alibaba Cloud, will spearhead a digital cooperation and create an ominchannel business. A full-channel business and data centre will also be created.

LOGISTICS NETWORK

The only duty free operator in China to have a Customs-supervised logistics network covering the whole country, CDFG has established six major customs-supervised logistics centres in Dalian, Qingdao, Shanghai, Shenzhen, Sanya and Hong Kong.

A statement from both parties concluded: “This strategic cooperation is a strong alliance between CDFG and Alibaba Group which are two industry leaders. The two parties will actively seek new business integration areas through an in-depth cooperation and application of digital technology to explore, innovate and create a new tax free and tourism and retail model.

“The aim is to concentrate on convenience and technology to further meet consumer needs.”