Tmall signs duty-free deals for travelers

Tmall Global, the cross-border e-commerce site of Alibaba Group Holding Ltd, has launched a new service to allow Chinese tourists to prepay for their duty-free purchases online before going on vacation.

The company has signed agreements with two major duty-free groups in South Korea and Thailand, meaning outbound Chinese travelers will be able to buy duty-free goods from Tmall Global and pick up their purchases at airports in the two countries before heading back to China.

Under the arrangement, outbound tourists can buy items from the Tmall stores of South Korea's The Shilla Duty Free and Thailand's King Power, and pay for them online in renminbi.

The move is expected to tap a growing demand by travelers, who spent 1 trillion yuan ($161.1 billion) overseas on shopping last year, according to the statistics from the Ministry of Commerce.

South Korea was the top destination for Chinese outbound travelers in 2014, and Thailand is expected to become more popular this year.

Liu Peng, the general manager of Tmall Global, said duty-free shops are becoming one of the major shopping destinations for Chinese outbound travelers.

"Through cooperation with these duty-free retail groups, we hope to save shoppers time and money, helping them avoid foreign exchange charges and queues at airports," he said.

Wang Jian, a professor with the Beijing-based University of International Business and Economics, said that by teaming up with the two duty-free shops, Tmall Global can expect to boost the size of its cross-border e-commerce business, a key battlefield for major e-commerce players in China.

Wang said one of the major reasons why Chinese are spending more overseas is the huge price differences between China and other countries, due to the tariffs posed on imported goods.