Showing posts with label ctrip. Show all posts
Showing posts with label ctrip. Show all posts

Monday, May 27, 2019

Travel: hard to make a buck for startups - William Bao Bean

William Bao Bean
Ctrip is one of China's successful travel companies, but for most startups, it is a tough market to crack, said William Bao Bean, managing director of the Shanghai-based China Accelerator, last week at a travel conference in Amsterdam, according to Phocuswire.com. Bean did identify some potential success stories, though.

Phocuswire.com:
Ctrip says that orders on the Customized Travel unit increased 180% in 2018. 
According to the research, travelers most likely to book the high-end travel tend to be women or couples aged 31 to 40 years old. Ctrip's data shows an average spend per person on a high-end customized travel package of $3,410 compared to $790 for a standard package. 
Ctrip is targeting China’s high-net-worth individuals who totalled 1.67 million in 2018, according to the report. 
Others are also seeing the potential in this segment with William Bao Bean, general partner at SOSV and managing director of Chinaaccelerator, investing in startups targeting these travelers. 
Speaking at the Phocuswright Europe conference in Amsterdam last week, he said most people are “chasing a fraction of a fraction of a fraction” and that while the travel market is huge there is “virtually no money in it.” 
He was talking about how difficult it is for early-stage investors to break in to the market and highlighted a company called Portier that Chinaaccelerator has invested in. 
Portier provides high-end phones to guests in top tier hotels enabling the properties to offer them additional services. 
Bao says that on average the company is increasing revenue room night by 20% and that it’s “high-margin revenue.” 
He also touched on another investment in a company called Lux’Sens, which connects luxury good retailers to consumers, saying that 40% of global luxury spend is from China and that more than half of that spend is outside of China. 
“50/60% of that [spend] happens outside China so why not try and capture that revenue.”   
The Ctrip Customized Travel unit estimates high-end customized travel will grow by 200% in the next three years.
Phocuswire.com.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.  

Wednesday, February 20, 2019

Travel startups have a hard time in China - William Bao Bean

William Bao Bean
A dramatic consolidation has made life tough for all startups in China, including those focusing on travel, says William Bao Bean, the managing director of its Chinaccelerator, China’s first and leading startup accelerator based in Shanghai, to Phocuswire. Opportunities he still sees for the fast-growing number of outbound Chinese tourists.

Phocuswire:
William Bao Bean has been active in startups and investing in Asia since 2004, and he says in the last few years there has been dramatic consolidation - similar to what has happened in other technology sectors - that has left three dominant players: Alibaba, Tencent and Ctrip. 
“This makes it challenging to be a startup,” he says. 
“It’s almost like the mice trying to run around while three elephants are walking around. And every once in a while they’ll accidentally - or maybe on purpose - step on the mice and there’s nothing the mice can do about it.” 
To survive in what he says is one of the most competitive markets in the world, startups must provide something that is truly unique and useful. 
“Going back five or 10 years, all you needed to do was show up and run faster than the next guy and you could build a pretty decent business,” Bean says.
But even with a superior product, survival is not guaranteed. Companies trying to reach a meaningful segment of China’s more than 1.4 billion residents need deep marketing budgets to pay for exposure on WeChat, Baidu and other mobile platforms. 
“Everywhere in the world customer acquisition cost is high, but in China it’s really, really high,” Bean says. 
“In the U.S. you might be able to spend $2 or $5 to get a user. In China, to get a user to download an app and open it once, it’s between $5 and $100.” 
So where are there opportunities for travel startups in China? Bean sees potential in areas such as experiences, particularly those offering unique, specialized products, and for startups that can create benefits for existing travel suppliers. 
One example that SOSV has invested in: U.S.-based Portier Technologies, which puts mobile phones in luxury hotel rooms, giving guests access to free data and minutes and giving the hotels a cut of revenue from services booked through the phone. 
But for non-Chinese companies such as Portier to succeed in that market, Bean says they need local market knowledge. 
“So if you are a big global player, you basically have to have a China play. But the issue is the infrastructure, the market, how you advertise, how you retain. Everything in China is a bit different,” he says. 
Bean cites Airbnb, a company his firm has worked with to understand the Chinese market, as an example of the learning curve. “Chinese culturally generally do not like being hosts. They really, really do not want some random person in their frickin’ house,” he says. 
"But the funny thing is, Chinese are perfectly willing to go live in somebody else’s house - especially if it’s in a nice neighborhood, in Los Angeles, in the hills. They love that. So Airbnb has not done particularly well signing up hosts, but they’ve been very successful at signing up Chinese who are traveling abroad.” 
Bean says the very large outbound market of travelers wanting new, unique and local experiences provides many opportunities for innovation. 
“As an investor, will I do another online travel agency? No. But there is still a lot of opportunity around travel, and there is still a lot of money to be made.”
More in Phocuswire.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on innovation at the China Speakers Bureau? Do check out this list.  

Thursday, September 21, 2017

How can new technologies find space in travel - William Bao Bean

William Bao Bean
Getting space in travel is hard for startups in new technology, says VC-veteran William Bao Bean, general partner at SOSV, as companies like Priceline and Ctrip in China dominate the industry. Unless you are able to solve specific problems, he tells WebinTravel.

WebinTravel:
“Travel is a closed insular industry, there’s a lot of history and baggage. The incumbents really don’t want it to happen – it’s not in their interests to open up too much. It’s also hard to compete against the likes of Priceline that spends US$6 billion on marketing or Ctrip, which is so dominant in China.” 
He however sees opportunities for “innovating around travel for companies that solve specific problems”. 
Bao Bean said that SOSV, which groups seven accelerators, does about 150 investments a year, out of which there may be two to four in travel. In total, SOSV’s portfolio includes 700 investments, with the number one sector being biotech and fossil fuels. Bao Bean also founded MOX, SOSV’s Mobile-Only Accelerator, in partnership with GMobi, the largest mobile platform for South-east Asia and India. 
In addition, he is also an active angel investor, doing about 40 investments a year personally. 
His interests in travel range from luxury travel – one of his investments include Go Portier, the hotel concierge service used at The Siam in Bangkok – to the corporate segment through an app that offers services in 20 cities across Asia Pacific. He’s also involved in Rikai Labs, a Shanghai and San Francisco-based startup that builds chatbots that are distributed via messaging platforms like WeChat, Messenger and Slack. 
Bao Bean is not afraid of testing – he tried social commerce for hotels “but it failed”. “You need decent engagement – event tickets, packages, weekend getaways, last minute trips – but it’s tough given Ctrip’s domination in the market.”
More in WebinTravel.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him in our meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on innovation at the China Speakers Bureau? Do check out this list.  

Friday, June 30, 2017

WeChat: indispensable for Chinese tourists - Matthew Brennan

Matthew Brennan at the EU Parliament
Europe is preparing for the 2018 China-EU Tourism year and the European Parliament invited social media expert Matthew Brennan to Brussels to brief them on the position of WeChat. He explained the committee how to improve Europe's performance, writes the China-EU newsletter.

The China-EU newsletter:
Matthew Brennan, Co-Founder of China Channel, explained the potentialities of digital marketing in China. 
If one is to understand China’s digital ecosystem, one needs to understand the phenomenon of WeChat. WeChat is not social media. It is not, as many people put it, China’s version of WhatsApp. WeChat is a tool, an operating system which integrates all different functions of life.” 
In order to attract Chinese tourists, Europe needs to become smarter and link to the very tools used by Chinese travelers, such as e-wallet solutions like WeChat Pay and Alipay, online booking apps like Ctrip and Dianping, and leading mapping platform Baidu Maps.
More at the China-EU newsletter.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more e-commerce experts at the China Speakers Bureau? Do check out this list.  

Friday, April 14, 2017

Ctrip: Airbnb's real threat - Jeffrey Towson

Jeffrey Towson
Airbnb has a chance in China, unlike many other US companies in the past, argued Beida business professor Jeffrey Towson earlier in the Guardian. On his weblog he gives the US company six additional advises, including marrying into Tencent and Alibaba. Also, Airbnb's real threat it the travel company Ctrip.

Jeffrey Towson:
Airbnb should worry about Ctrip. This is their biggest threat. 
In September, Airbnb announced it has had “a 500% increase in outbound travel from China in just the past year.” They also said “since 2008, there [has] been over 2 million guest arrivals from China at Airbnb listings worldwide.” These numbers strike me as pretty suspect (if you have good numbers in 2016, you don’t point all the way back to 2008). But let’s assume they have some decent adoption in China today. 
As mentioned, there is no chicken-and-egg problem for Airbnb cross-border. They already have an international network of apartments and guests. And, most importantly, they already have many of the strengths I mentioned in Part 1: a network effect, economies of scale in operations and marketing, a full suite of features and services, an ability to bundle services, and an ability to subsidize across their MSP. 
I don’t think Chinese competitors can compete with them internationally in home-sharing. It is very difficult to launch an international two-sided network in general. But to do so against an entrenched incumbent is next to impossible. So I think Tujia and Xiaozhu on their own have very little chance against Airbnb outside of China. However, Ctrip is a serious competitor internationally. They are making moves in this area (i.e., their recent acquisition of UK-based Skyscanner). They also are the largest investor in Tujia. 
Ctrip should worry Airbnb. My next article on the US-China platform wars is about Ctrip vs. Expedia internationally.
Five more tips for Airbnb at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out his list.    

Monday, January 09, 2017

How Airbnb can win in China - Jeffrey Towson

Jeffrey Towson
Uber was the last American firm failing to enter China. But it has not stopped newcomers to enter this tough market. Airbnb is the latest arrival and Peking University business professor Jeffrey Towson gives the US firm some tips on how to win access at his LinkedIn page.

Jeffrey Towson:
2: Airbnb should focus first on dominating China’s outbound home-sharing market. 
In 2015, over 110M Chinese tourists flew overseas – where they stayed in hotels, short-term rentals and / or home-shares. Note: over 50% of tourists in Asia this past year were from China. 
This part of the market is much clearer. First, one side of the platform (the listed homes) is already in place. Second, the price differential for home shares versus hotels in places like New York and London is much more compelling. Especially for families. And third, the chicken-and-egg problem is already solved. The international platform is up and running. Uber did not have this type of cross-border market in China. Airbnb does and should try to dominate it quickly. 
Airbnb’s first line of attack can be a horizontal attack on travel agencies (an MSP vs. VI attack). They can use their big MSP to subsidize the prices to Chinese tourists currently using travel agencies and packages. Chinese tourists do not really travel independently yet. They prefer flight and hotel packages (plus visa and other services). Organized tour groups are also popular. 
However, two MSP competitors are operating in this space, Ctrip and Zhubaijia. Zhubaijia offers all-in-one outbound services, including accommodations, car rentals and customized guided tours for Chinese travelers. They are bundling home-sharing with other services. And they are providing quality control for Chinese families on their trips, such as convenient locations, quality checks, security, etc. However, Ctrip is the big competitor and will discussed in the next section. 
Uber never had this type of cross-border market when it entered China. The ride-sharing market is mostly locally. I would argue it is mostly city-by-city. Adding drivers in Chengdu doesn’t really benefit riders much in Beijing. But home-sharing is a naturally international market. So Airbnb should focus on this outbound segment. The market is big and clear – and they have strong advantages already in place. 
#3: Airbnb should worry about Ctrip. This is their biggest threat. 
In September, Airbnb announced it has had “a 500% increase in outbound travel from China in just the past year.” They also said “since 2008, there [has] been over 2 million guest arrivals from China at Airbnb listings worldwide.” These numbers strike me as pretty suspect (if you have good numbers in 2016, you don’t point all the way back to 2008). But let’s assume they have some decent adoption in China today. 
As mentioned, there is no chicken-and-egg problem for Airbnb cross-border. They already have an international network of apartments and guests. And, most importantly, they already have many of the strengths I mentioned in Part 1: a network effect, economies of scale in operations and marketing, a full suite of features and services, an ability to bundle services, and an ability to subsidize across their MSP. 
I don’t think Chinese competitors can compete with them internationally in home-sharing. It is very difficult to launch an international two-sided network in general. But to do so against an entrenched incumbent is next to impossible. So I think Tujia and Xiaozhu on their own have very little chance against Airbnb outside of China. However, Ctrip is a serious competitor internationally. They are making moves in this area (i.e., their recent acquisition of UK-based Skyscanner). They also are the largest investor in Tujia. Ctrip should worry Airbnb.
More at Jeffrey Towson´s LinkedIn Page.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on managing your China risk? Do check out this list.  

Thursday, January 05, 2017

The war between US and Chinese platforms - Jeffrey Towson

Jeffrey Towson
Chinese platforms are going global: Ctrip, Didi, Alibaba, Baidu, UnionPay. Global platforms try to enter China: Airbnbn, Uber, Google, Facebook. Peking University business professor Jeffrey Towson welcomes us to the US-China platform war, and explores on his LinkedIn page the battle field.

Jeffrey Towson:
Point 3: Complementary and inter-connected platforms can be particularly powerful. A single platform is good. As mentioned, it can have lots of strengths, particularly when competing against a traditional vertically integrated merchant (VI). Especially, if you can get a network effect and some economies of scale going. 
But complementary networks can be even better. This is when you actually have two different (Multi-Sided Platforms) MSPs serving a common set of users. The two MSPs can sort of amplify each other. For example, Microsoft Word (an MSP) is helped by being on the Microsoft Operating system (another MSP). They both have a user group in common and amplify each other. A mapping application (sometimes an MSP) linked into Wechat (another MSP) is another example. Complementary networks are very common in China, where much of the mobile world has collapsed to a few powerful ecosystems (Alibaba, Tencent, Baidu). 
However, inter-connected platforms are arguably even better. This is when a platform (or set of features) is actually integrated within another platform - to the point that the whole thing becomes inseparable within a service. The feature the user group sees and uses is actually being delivered by several interconnected platforms. For example, advertising-based media (e.g., Yahoo, broadcast TV) is increasingly inter-connected with advertising networks (i.e,. platforms that match advertising buyers with available inventory in real-time). That’s how the ads on Yahoo, Baidu and Google get placed in real-time based on who you are or what you are looking at. There are actually +2 interconnected MSPs delivering this service.
More at Jeffrey Towson´s LinkedIn Page.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more strategy experts at the China Speakers Bureau? Do check out this page.  

Wednesday, November 30, 2016

Online travel market: fast moving to mobile - Jeffrey Towson

Online markets are fast moving to mobile. The US$1.7bn purchase of Skyscanner by leading travel booking service Ctrip illustrates that move, says Jeffrey Towson, business professor at the Peking University in the Financial Times. "What they need next is a hotel network," adds Towson.

The Financial Times:
Skyscanner is focused on the online travel market shifting to mobile devices and three-quarters of Ctrip bookings are now made online using smartphones, according to Jeffrey Towson, professor of investment at Peking University. Mobile visits account for 59 per cent of Skyscanner’s total traffic.... 
Prof Towson said: “The biggest opportunity for Ctrip is to connect two massive groups — Chinese consumers, and international airlines and hotels. What they really need next is a hotel network. That’s where the real power is, with tens of thousands of hotels across Europe and Asia as potential clients.”
More in the Financial Times.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on China´s outbound investments? Do check out our list here.  

Tuesday, October 04, 2016

Why did Expedia and Morgan Stanley fail in China - Jeffrey Towson

Jeffrey Towson
Jeffrey Towson
Failing foreign companies are all too common in China. Peking University business professor Jeffrey Towson dives into two specific cases, trying to learn from the mistakes by Expedia and Morgan Stanley, at his LinkedIn page.

Jeffrey Towson:
It all looked pretty good. So why in 2015 did they sell their entire eLong stake for $671M? Why after almost ten years of work did they exit China? What happened? 
My assessment is that they got tired of losing money. eLong was frequently losing money and impacting Expedia's overall returns. In the most recent quarters before Expedia's exit, eLong was still occasionally losing around $20M per quarter. 
This is an example of the situation I call "last man standing". Competitors ramp up spending on capacity or price subsidies and everyone loses money. The market then becomes a contest of who is willing and able to lose the most cash. In the end, whoever is "left standing" gets the market. Uber and Didi recently had this situation. It can be a particularly effective strategy against foreign companies. 
So even though Expedia won big in China, becoming one of the three major players. They were still losing cash after ten years of work. And they eventually cut their losses. They sold their stake in eLong, much of which was then quickly purchased by ctrip. 
Morgan Stanley and CICC: A case of "what have you done for me lately?" 
CICC (China International Capital Corp) was launched in 1995 as a joint venture between Morgan Stanley and China Construction Bank (i.e., People's Construction Bank of China). For Morgan Stanley, this was their single largest investment in an emerging market to date ($35M for 34.3% ownership). And it was their primary strategy for becoming a player in China's domestic capital market. 
And the enterprise was very successful. CICC has gone from the 40 employees at launch to over 4,200 employees today. Revenues in 2015 were over 8B RMB. 
However, Morgan Stanley sold its stake in CICC in 2011 - and had been trying to sell as early as 2008. There are various reasons for this, including the financial crisis and dealing with limits on how many banks / JVs a foreign company can have in this sector. But underneath this was also the fact that CICC was no longer an operational vehicle for Morgan Stanley in China. It had become a passive investment. 
So what happened? 
My standard question for any company in China is "what is your advantage or value-add?". Good answers to this can be technology, foreign customers, a well-known brand, and cross-border operations. But my follow-up question is always "and how long will this advantage or value add last?". This is the question that often catches companies.
More at Jeffrey Towson´s LinkedIn page.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts to deal with your China risks? Do check out this list.  

Wednesday, January 06, 2016

Ctrip, Qunar team up in travel market - Kaiser Kuo

Kaiser Kuo
Kaiser Kuo
While competition can be fierce in China, another feature is even more remarkable. Competitors team up, like Ctrip and the Baidu-supported Qunar have swapped shares. Baidu communication director Kaiser Kuo explains in the New York Times why the companies together can serve better the travel market.

The New York Times:
Despite fears about the health of the Chinese economy, the travel market is still growing. Ctrip’s second-quarter revenue rose 47 percent, to $408 million, from a year ago. Qunar’srevenue increased 120 percent, to $142.1 million in the second quarter. 
Kaiser Kuo, the international communications director for Baidu, said the agreement with Ctrip would give Qunar more opportunities to cooperate on mobile search and map-based products. 
He also said the two companies would be able to benefit from each others’ strengths in different markets. 
“Ctrip is big on high end business travel, Qunar has been more leisure, personally booked travel,” he said. “We’re covering more bases, a broader demographic.”
The travel industry is not the only sector that is seeing companies team up amid steep competition. 
Meituan, a group buying service, and Dianping, a consumer review site, agreed to join forces this month with the goal of creating an e-commerce juggernaut.
More in the New York Times.

Kaiser Kuo is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more e-commerce experts at the China Speakers Bureau? Check out our list here.  

Monday, October 11, 2010

Buy Ctrip and Yun! - Shaun Rein

ShaunRein2Shaun Rein by Fantake via Flickr
Domestic consumption is growing and Shaun Rein tells at CNBC what companies investors should be looking at in the short term. While both McDonalds and Yum! are doing well, Shaun Rein prefers Yum! since they cater for different consumer markets with different price points, while McDonalds sticks to one price for all.
Travel is going to be important, as cars allow Chinese consumers to travel more domestically, young Chinese with cheaper cars, looking for budget hotels. Ctrip, China's successful travel portal would be an obvious investment.

Commercial
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.


Wednesday, August 25, 2010

Chinese brands moving up the value chain - Shaun Rein

Shaun2Shaun Rein   by Fantake via Flickr
Chinese brands might have been competing on prices and distribution in 2005, in 2010 they are moving up in the value chain and worry Western brands, writes Shaun Rein in Forbes. Quality and image-building have entered China's board rooms.
Look at Google. Our research suggests that Google failed in China in large part because consumers believed that Baidu had far better Chinese-language search capabilities, not just because of an unfair playing field. In head-to-head search comparisons we conducted, Baidu's results weren't necessarily much better than Google's, but its branding as the site that knows Chinese better than Google and that has technology as good has helped it dominate. Unused to serious local competition, Google was slow to roll out local services and marketing campaigns that would resonate with Chinese consumers. Similarly, Ctrip, an online travel site, is beating up Expedia, and Taobao, the online auction site, remains far ahead of eBay. They are better branded, and they fit the needs of local consumers better.
 More trends multinational companies have to watch out for in China in Forbes: rising labor costs and the new focus on domestic consumption.

Commercial
Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.