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The Star: May 11, 2017

16 Thursday

16 Thursday May 11 2017 Latest Christchurch news at www. .kiwi The Star News Christchurch Airport’s plan to reach On a cold, damp, smoggy night in China, Fran O’Sullivan talks to Christchurch Airport chief executive Malcolm Johns about plans for a virtual airport terminal, autonomous vehicles, augmented reality and artificial intelligence CHRISTCHURCH Airport chief executive Malcolm Johns is on a roll as he outlines his plans to put innovation at the centre of the company’s growth strategies. Mr Johns outlined the vision which brought him and handpicked senior executive Justin Watson to Hangzhou to cement an agreement with e-commerce giant Alibaba. “We very much want to bring a virtual and a real terminal together for visitors and in the area of big data, the agreement we are about to execute with Alibaba is the biggest step we have taken in that space,” Mr Johns said. What Christchurch Airport and Alibaba later signed was a memorandum of understanding which, at its most basic level, will connect small and regional New Zealand businesses with Chinese visitors before, during and after their visits. This promises to open up the power of microexporting – particularly from the South Island. The signing ceremony at Alibaba’s massive Hangzhou campus was attended by Alibaba Australasian executives and the New Zealand consul-general to Shanghai, Guergana Guermanoff. The companies’ strategic partnership plays into a vision which is being strongly promoted by Alibaba founder Jack Ma, to have two billion consumers in microtrading relationships with tens of millions of businesses around the world by 2026. It will also open the way for Chinese visitors to more easily book trips to New Zealand, pay for items while they are here and then re-order quality products they have sampled in New Zealand after they return home to China. “Alibaba’s e-commerce is the biggest in the world,” says Mr DEAL: Christchurch Airport chief executive Malcolm Johns and Alibaba Australasian business development director John O’Loghlen sign a memorandum of understanding at Alibaba’s Hangzhou campus. Johns. “It’s integrated and very powerful, but the raw power of it is not its mass but its individuality. “It’s not about the big numbers. It’s about the one-to-one direct trading relationships that allow for surgical micro-exporting to develop.” Mr Johns took the reins at Christchurch Airport three years ago. The airport had lost about half a million passengers a year in the wake of the devastating February 22, 2011, earthquake, and had lost significant market share relative to Auckland Airport. “We were very much looking at how we could bring leadership, ambition and confidence back into the city.” Mr Johns had been chief executive of the InterCity Group and had served on the board of Tourism NZ. Mr Watson, who is his chief aeronautical and commercial officer, was head-hunted for his strong background in fastmoving consumer goods and was more recently Tourism NZ’s director of trade, PR and major events. In 2014, the airport set strategic objectives to achieve 8.5 million passengers a year by 2025 (forecast to add $1 billion annually to South Island and NZ GDP), generate 10,000 new jobs across the regions and provide competitive returns to shareholders. Early signs are that the strategy is working. The South Island’s gateway for international visitors set an all-time record of 6.3 million passengers for the 2016 financial year. Servicing the South Island tourism market also resulted in more than $180 million of new GDP in all regions of the South Island – as well as generating a record $31m in dividends for shareholders. Will you help break the cycle? For young people who have been exposed to family violence getting the right support is important. Aviva’s Youth Service gives young men and women the tools to create safer and healthier relationships in the future. Will you help break the cycle of family violence by making a donation to Aviva’s annual appeal? To learn more and make a donation visit avivafamilies.org.nz

The Star Latest Christchurch news at www. .kiwi Thursday May 11 2017 17 new heights with Chinese company Details of Christchurch Airport’s disruptive strategy are commercially sensitive. But already, autonomous vehicle trials are under way; a driverless, electric Smart Shuttle is expected to be operating by 2019, moving 15 passengers at a time. Other autonomous applications are being discussed and the company is in the early exploratory stages of using artificial intelligence. “At a philosophical level, we were just trying to target value, capture value and create value in the visitor sector and our focus on big data converged on Alibaba,” said Mr Johns. Mr Watson says small New Zealand businesses frequently experience difficulties trying to make an impact in China. By installing the online payment system, Alipay, in their retail outlets, Kiwi small and mediumsized enterprises could make more from the Chinese visitor experience and move to microtransactions with tourists who have been to New Zealand. The strategy was underpinned by a Berl study which indicated that such consumers would be Zealand products if they had been here. Said Mr Watson: “There is an opportunity to target and attract higher value visitors from China to stay on and spend more. There is also a skew towards young in groups which exactly overlays with Alibaba’s audience as well.” “Through Fliggy [Alibaba’s travel service, previously named Alitrips], there is the ability to target them before they get to the South Island. And through the and create new value streams for New Zealand SMEs to have those micro-transactions.” Mr Johns points out that Christchurch Airport can step in and build an online platform (or virtual terminal) on which SMEs can display their products – “they don’t have the expertise to data mine and highly target visitors”. “For us, it fits into the virtualisation of our terminal. We can only fit so many retail outlets inside a physical terminal, but if you create a virtual overlay on top of it, you can extend your passenger spend rates and your retail relationships in particular. “What drives us is building a virtual terminal and what Alibaba gives us the opportunity to do, is to take what we are already doing in the tourism sector and extend it out to the productive sector, particularly for SMEs.” Mr Johns hit on the concept at a seminar in China, where the general manager for Spanish company, Mango Leisure, talked about their lessons from operating in both the “High St” and online in China. “What digital in China is the big numbers but it is actually the little numbers that really count. That is where the power sits.” There is precedent. When China Southern started flying to Christchurch, strong visitor demand saw stocks of Mt Cook Aoraki salmon virtually wiped out due to the highly seasonal nature of tourism. “If you have got a group of consumers that are self-selecting an interest in Aoraki salmon and they have an excess of supply during the winter months, then your opportunity is to use that pre-qualified group to extend the trading relationship through micro-exporting,” says Mr Johns. “When we looked at the Alibaba platforms, what we found was the cost for a SME to be on some of those platforms was prohibitive, so if we could do what we do in our terminal and aggregate the platform and also aggregate the virtual terminal for those SMEs in the regions to be able to trade off, then that fits into our virtual terminal strategy. six times more likely to buy New THUrsdaY JanUarY 31 2013 professional females who travel data we can continue to build most businesses look at with mainland •Turn to page press 18 29 Diesel The diesel professionals specialising in 4WD RepaiRs seRvicing & all WoRk guaRanTeeD 288 Lincoln Road (opp ANZ) Ph: 338 8884 • www.dieseldoctor.co.nz Mechanical styleand auto electronics noun Special Magazine & TV | sTyle.kiwi elegance and sophistication. synonyms: flair, grace, poise, polish, suaveness, urbanity, chic, finesse, taste, class, comfort, luxury, affluence, wealth, opulence, lavishness. 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