China Eastern Airlines, a leading carrier in China, has formed a strategic alliance with Alibaba Group’s Alipay and Taobao subsidiaries to expand China Eastern’s capability to serve more customers through e-commerce. Under the alliance, Alipay will provide online payment support for ticket sales on the China Eastern website (www.ceair.com). China Eastern will also launch a flagship store on Taobao’s Taobao Mall to sell tickets directly to customers for all domestic flight routes.

“Direct online ticket sales is economical and convenient, thereby making it the most ideal way for a modern airline carrier to give back to its customers,” said Ma Xulun, general manager of China Eastern Airlines. “Through e-commerce, China Eastern aims to improve its ratio of direct ticket sales and thereby its competitive advantage in the marketplace. Additional online sales channels and online payment methods will help the airline save on operational costs as well as improve the efficiency of capital investments.”

“Alipay is proud to provide secure third-party online payment support to the China Eastern website while also supporting its flagship online store on Taobao Mall,” added Shao Xiaofeng, president of Alipay. “It is a priority for Alipay to continue to set the industry standard in providing safety and security in online payment transactions as increasing numbers of companies around the world look to reach customers in China through e-commerce.”

“As more and more Chinese consumers turn to Taobao to meet all of their lifestyle needs, it is important for Taobao Mall to continually enhance its range of quality product offerings,” said Jonathan Lu, president of Taobao. “Through the China Eastern store on Taobao Mall, Chinese consumers, including the more than 145 million registered Taobao users, will have access to the most competitively priced airfares and benefit from a centralized customer service portal that can address their needs at every stage of the shopping experience.”

This alliance highlights the macro trend of multinational companies turning to e-commerce to provide greater convenience to existing customers as well expand its customer base. China Eastern Airlines is the latest of the many major companies turning to Taobao Mall and Alipay to grow their businesses and better serve customers across China. Taobao Mall, launched in April 2008, was established as a B2C platform for corporate retailers to offer Taobao users greater shopping selection. China Eastern joins the ranks of major international and domestic brands such as Uniqlo, Procter and Gamble, Bestseller and Lenovo, who have all launched flagship online retail storefronts in Taobao Mall and rely on Alipay to facilitate their online payment.

According to the latest research by iResearch Consulting Group, Taobao is the second largest online destination for plane ticket purchases in China¹ while Alipay is a leading online payment partner for many domestic Chinese airlines. In late 2007, Taobao introduced an airline ticket purchasing channel and more than 100 travel agencies have since established online stores on Taobao. Company data indicates more than 800,000 searches are conducted daily in China for airfare prices on Taobao. Between September 14-20 of 2009, Alipay handled approximately RMB 900 million (US$132 million²) in transaction volume of online plane ticket sales.

About Alibaba Group

Alibaba Group is a global e-commerce leader and the largest e-commerce company in China. Since it was founded in 1999, Alibaba Group has grown to include the following core businesses: Alibaba.com (HKSE:1688.HK), Alibaba Group's flagship company and the world's leading B2B e-commerce company; Taobao, China's largest Internet retail Web site and a one-stop platform for shopping, socializing and information sharing; Alipay, China's leading third-party online payment service; Alibaba Cloud Computing, a developer of advanced data-centric cloud computing services; and China Yahoo!, one of China's leading Internet portals.

About Taobao

Launched in 2003, Taobao (www.taobao.com) is the largest Internet retail website in China with 78 percent of the Chinese domestic online consumer market³. It provides the most comprehensive product offering and serves nearly 145 million registered users. Transaction volume on Taobao (gross merchandise volume or GMV) reached nearly RMB 80.9 billion (US$11.8 billion) in the first half of 2009, exceeding the largest retailer in China in transaction volume during the same period. According to government statistics, Taobao’s GMV equaled approximately 1.4 percent of China's total retail trade in the first half of 2009. Taobao is the primary online shopping destination for the largest online population in the world⁴.

About Alipay

Alipay is China's leading online payment solution, enabling individuals and businesses to execute payments online in an easy, safe and secure manner. Alipay had a registered user base of over 200 million as of June 2009. Alipay partners with banks to provide an escrow service for payments, which reduces the settlement risks faced by Alipay's customers in their e-commerce transactions. Alibaba Group founded Alipay, headquartered in Hangzhou, in 2004.

¹ iResearch Consulting Group 2009 Q2 China Online Travel Quarterly Research Report. (September 2009)

² Based on currency exchange rate of US$1 = RMB6.829.

³ iResearch China Online Shopping Research Report: 2008-2009. Shanghai: iResearch Consulting Group.

⁴ According to China Internet Network Information Center (CNNIC), China had 338 million Internet users as of June 30, 2009.