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Alibaba Inks Broad Partnership with Singapore Airlines

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Delivering global orders within 72 hours

Alibaba (BABA) recently entered a wide-ranging partnership with Singapore Airlines, building on the existing relationship between the two companies. The latest partnership covers areas such as ticket sales, logistics, and cloud computing.

In ticket sales, Singapore Airlines expects to gain access to over 600.0 million active mobile users on Alibaba’s e-commerce platform. In logistics, the airline expects to work closely with Alibaba’s logistics arm, Cainiao Network, toward achieving Alibaba’s goal of delivering orders across China in 24 hours and globally within 72 hours.

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Cloud services uptake

In cloud computing, the airline expects to explore how its information technology ecosystem can benefit from Alibaba Cloud. The arrangement with Singapore Airlines could help Alibaba accelerate the growth of its cloud business and capture a larger share of the global cloud market.

Alibaba held only 5.0% of the global cloud market at the end of the second quarter, according to Synergy Research. That compared to Google’s (GOOGL) share of 6.0%, IBM’s (IBM) share of 8.0%, Microsoft’s (MSFT) share of 14.0%, and Amazon’s (AMZN) share of 34.0%.

Driving tourists’ adoption of Alipay

Singapore Airlines already offers Alibaba’s Alipay as a payment option on its website. The new partnership could see the airline increase its use of Alipay.

Alibaba has been marketing Alipay to Chinese tourists, saying it could simplify their transactions when they travel abroad. In the United States, retailers have adopted Alipay as a way to attract Chinese tourists to their stores. Tencent (TCEHY) also markets its Alipay rival WeChat Pay to Chinese tourists.

The expanded partnership is expected to see Singapore Airlines increase its use of Alipay, expanding the opening for Alibaba to reach more Chinese tourists with Alipay. About 130.5 million Chinese tourists traveled overseas last year, according to the China Tourism Academy. Singapore received 3.2 million Chinese tourists last year.

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