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JD Group and Trip.com partner to catch travel industry rebound

China’s largest travel agency and an e-commerce giant join forces to take advantage of travel rebound.

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JD Group, the parent company of e-commerce giant JD.com (HKEX: 9618), announced a strategic partnership on August 16 with Trip.com (NASDAQ: TCOM), China’s biggest online travel agency, to integrate their traffic and supply chains.

The agreement comes at a time when China’s domestic travel industry is showing signs of recovery as the country slowly goes back to normal and eases travel restrictions within provinces. The two will launch a flagship store for Trip.com on JD.com’s platform to seize this window of opportunity for tourist market recovery.

As part of the partnership, Trip.com will offer travel deals and competitive ticket and package prices on JD.com. In return, JD.com will give Trip.com access to its 400 million active users, as well as offer supply chain support and targeted marketing. The tourism products are expected to be launched on JD.com within eight months.

The statement also underlined that in the future, the two parties will cooperate by sharing user data, conducting joint marketing, and expanding further into the travel business.

According to China Daily, Trip.com Group CMO Sun Bo said that through the strategic cooperation, the company will not only bring JD.com highly competitive tourism products and services, but will also be able to provide more diversified products and services to more than 400 million Trip.com users worldwide.

Last year, the number of domestic tourist trips exceeded 6 billion, and the tourism industry accounted for 11.05% of the total GDP, making it a significant part of the economy. However, the industry is among the hardest hit by the COVID-19 outbreak, and Trip.com was severely affected. The company reported a USD 754 million loss in the first quarter as the coronavirus pandemic brought travel to a halt. During that time, tens of millions of trips booked on Trip.com were canceled or rescheduled, with lost orders worth more than 31 billion yuan (about USD 4.46 billion).

Recently, China’s domestic tourism market has shown signs of recovery, and Trip.com has begun to work on its rebound.

“New reservations for domestic hotels and air travel bookings within China have returned to around 70% of what they were before COVID-19,” the company’s CFO told Nikkei Asian Review.

Last month, the company announced increasing its initial USD 140 million financial assistance, provided to its global partners, to USD 500 million to help revitalize the overall travel industry.

“Although the tourism industry has been affected to a certain extent under the influence of the COVID-19 outbreak since the beginning of this year, JD has always been firmly optimistic about the potential of China’s tourism industry and continues to promote the layout of the tourism sector,” the two companies concluded in their joint statement.