Caixin
Aug 17, 2020 08:25 PM
BUSINESS & TECH

JD.com, Trip.com Tie Up as Domestic Travel Comes Back to Life

Ctrip’s headquarters in Shanghai on April 3.
Ctrip’s headquarters in Shanghai on April 3.

China’s biggest online travel agency, Trip.com Group Ltd., has announced a deal with e-commerce giant JD.com Inc. in which they will share traffic and resources as the domestic travel market restarts in the wake of country’s Covid-19 epidemic.

In twin statements, the companies said Trip.com will bring competitively priced tickets to the table, while JD.com will offer its 8 million corporate and 400 million individual users, livestreaming resources and marketing prowess.

Under the deal, people will be able to buy Trip.com products and services on JD.com’s platform, and the company will become a “strategic supplier” to JD.com’s existing travel unit, a Trip.com spokesperson told Caixin. The spokesperson said the companies would not share user data.

A spokesperson for JD.com declined to confirm those details and said the partnership was in its early stages.

The companies’ statements said they expect Trip.com products to start appearing on JD.com’s platforms by the second quarter of 2021.

Travel has become an increasingly important area for China’s internet giants. Fliggy, a travel services platform owned by Alibaba Group Holding Ltd. had 416 million monthly active users as of the second quarter, up 80% from the same period in 2018, according to market research firm Statista.

However, 2020 has been a disastrous year for the travel industry amid the global pandemic. Trip.com said in the statement that tens of millions of orders were refunded or rescheduled “during the epidemic period.” In the first quarter, Trip.com’s net revenue plunged 42% year-on-year to 4.7 billion yuan ($676 million), according to the Nasdaq-listed firm’s financial report. It also suffered a net loss of 5.4 billion yuan, compared with a net profit of 4.6 billion yuan during the same period last year

The company has tried to offset some of these losses by embracing the livestreaming e-commerce trend that has grown increasingly popular this year. The company has offered “livestreamed travelling” sessions of travel experiences, such as visits to luxury hotels and restaurants. In the 40 livestreamed travel events that the company has organized since March, it has racked up over 1.1 billion yuan of gross merchandise volume (GMV). GMV is a measure of sales used by e-commerce platforms that host goods and services provided by third parties.

Beijing-based research body the China Tourism Academy predicted that domestic tourism revenue would fall 20.6% this year. A total of 5.7 trillion yuan of tourism revenue was generated from 6 billion domestic trips in 2019, according to National Bureau of Statistics.

The Chinese mainland reported 22 new Covid-19 cases with symptoms on Sunday, all of which were among travelers arriving in the country from overseas.

Contact reporter Flynn Murphy (flynnmurphy@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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