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Kyushu Railway partners with Alibaba to draw Chinese tourists

Japanese companies lean on China's IT giants to promote regions

Makoto Kouyama, CEO of Japan, left, and Koji Karaike, chairman of Kyushu Railway, at a news conference held in Fukuoka on July 23.

TOKYO/ FUKUOKA -- Alibaba Group Holding and Kyushu Railway announced Monday a partnership aimed at drawing more Chinese tourists to Kyushu island, the third largest in Japan.

Kyushu Railway is a company under Japan Railways Group and operates hotels and restaurants, and organizes package tours in the region. Under the agreement, Alibaba will sell Kyushu Railways' tour packages, rail tickets and hotel rooms on its travel site "Fliggy" which is visited by 10 million users each day. In return, Kyushu Railway will install Alibaba's mobile payment service Alipay in its group companies.

The vast majority of Chinese tourists to Kyushu come on cruise ships, which means that they stay for little more than half a day. Kyushu Railway wants to encourage other longer-staying tourists to the area. Only 230,000 Chinese tourists, excluding those on cruises, visited Kyushu directly last year. The two companies are hoping to push that figure up to one million by 2023 with their collaboration, half of which is hoped will be generated by Alibaba.

"We use data technology to attract Chinese tourists to Kyushu," Makoto Kouyama, CEO of Japan, said at a news conference on Monday in Fukuoka. Alibaba has over 500 million users and Kouyama says the company can motivate this customer base by using artificial intelligence to offer targeted information about Kyushu. "We can extract users whose profiles are similar to visitors to Kyushu," Kouyama added.

"We have to tell tourists about the attraction of Kyushu," Koji Karaike, chairman of Kyushu Railway, said at the conference. "Chinese tourists spend about 150,000 to 200,000 yen ($1,350 to $1,800) during each trip to Japan." By dramatically increasing the number of Chinese tourists, he aims to increase total consumption spending to around 150 billion yen.

Alipay is already available at 50,000 stores in Japan and installed in the 400 stores related to Kyushu Railway. Under the collaboration, the two companies hope to increase this figure.

"Although Chinese tourists are becoming more adventurous, newcomers to Japan are more likely to take the so-called Golden Route that includes Tokyo, Mount Fuji, Kyoto and Osaka," said an official at Kyushu district transport bureau. He said Kyushu has to compete with Asian rivals such as South Korea and Southeast Asia.

Japanese companies, keen to attract Chinese tourists, are teaming up with China's IT groups to promote the regions. Alibaba's rival Tencent Holdings announced last week it had teamed up with railway company Fuji Kyuko to install its mobile payment service WeChat Pay at amusement park, Fujikyu Highland.

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