Alibaba deal to boost Chinese spending and Christchurch Airport revenue
A partnership deal between Christchurch Airport and e-commerce giant Alibaba has the potential to generate $1 million a week in sales to Chinese consumers.
The airport has signed a memorandum of understanding with Alibaba which will result in a concerted effort to get more South Island businesses accepting popular electronic payment system Alipay.
But longer term the airport also wants to earn extra revenue by opening a virtual store on Alibaba's Tmall Global website, charging New Zealand firms wanting a presence there.
Christchurch Airports' chief commercial officer aeronautical Justin Watson said only about 13 per cent of Chinese tourists had credit cards, so access to Alipay influenced their spending.
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"At the moment a lot of them won't spend because they don't have the mechanism".
The airport and Alibaba will run a series of workshops throughout the South Island with the aim of signing up at least 50 small to medium sized businesses to Alipay in the next year.
Watson said Alipay also offered promotional opportunities and the airport would help businesses create profiles and translate them into Mandarin.
"If Chinese visitors turn up in Oamaru they can look at their app and see these five restaurants accept Alipay, and here's some information about them; it's like a directory".
The airport company has a $1m budget for the roll out of its partnership deal with Alibaba.
That includes the $100,000 cost of setting up a sales platform on Tmall and employing staff to analyse and distribute sales data to participating businesses.
Watson said the transaction fee charged to New Zealand companies listing with the Tmall "store' would generate revenue for the airport and they hoped to have it running within 12 months.
The commercial structure was still a work in progress, but once established in the South Island, they would offer a similar service to North Island businesses.
The big advantage was that Chinese visitors would be able to continue buying New Zealand products they had come across while holidaying here, he said.
And the data acquired through Alipay would allow businesses to target customers rather than "trying to throw a pebble into an ocean of Chinese consumers.
"If we know that they've gone to the Mackenzie Country and bought Aoraki Salmon, we can serve them up an ad for Aoraki Salmon when they go back home".
Watson said the goal was that by 2025 the initiative would generate $1m a week in sales to New Zealand SMEs.
Chinese travellers use other Alibaba apps, such as travel service Fliggy, to plan their trips and Kiwi tourism operators could promote their activities on the site, he said.
Data gathered from this and other sales platforms would help to plug gaping holes in our knowledge of Chinese visitor movements and spending habits.
"The international visitor survey just captures which regions they visited, but you don't know in what order, or for how long.
"As long as we have the coverage of Alipay, we're going to know where the visitors go and for how long", said Watson.