China Eastern Airlines is teaming up with Chinese e-commerce Alibaba to try and push online sales. Shanghai-based China Eastern has struggled in a market with surging fuel costs, volatile travel trends and ever-intensifying competition.
Under the announced alliance, China Eastern will set up an online ticket store on Alibaba’s retail website, Taobao.com. Alibaba will in turn provide payment services for China Eastern’s ticket sales via its Alipay system.
Ma Xulun, China Eastern’s general manager, said, "Direct online ticket sales are economical and convenient. Through e-commerce, China Eastern aims to improve its ratio of direct ticket sales and thereby its competitive advantage in the marketplace."
Taobao’s cachet could help China Eastern drastically boost sales, says Cao Fei, a senior analyst at Analysys in Beijing. Cao said, "This is a very innovative step for China Eastern, stepping into the online business."
People now really like to shop online, from very cheap stuff to even luxury goods. It has become a lifestyle, or a very smart way to get reasonable prices.
The Street said that for China Eastern, long burdened by its huge dollar-denominated debts, the tie-up could mean higher ticket sales with little extra investment.