Expedia to conquer China
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Expedia has a two-fold approach for each and every market. Firstly, building own brands organically and secondly, partnering with strong local brands.
The group currently has tie-ups with Ctrip and eLong, the company in which it sold its stake last year.
According to sources, the possibility of eLong breaking-even, at least over the next few years, looked bleak considering the way the duel between OTAs, especially Ctrip and Qunar was shaping up. But still more than the domestic travel segment, the foreign companies are looking at the inbound Chinese market, as well as the outbound opportunity.
So going by the current status in China, there is ample opportunity in powering an established brand, but Mieke De Schepper, VP Asia-Pacific at Expedia Lodging Partner Services, isn’t ruling out the possibility of carving a niche for Expedia as a brand in the market.
“Over a period of time, the mix (the probability of a relatively stronger contribution from the company-owned brand) can evolve. In fact, this in turn can pave way for deeper insights which can eventually benefit our partners as well,” says Mieke.
Expedia has taken a “global plus regional plus local” approach to running operations here.
In 2015, Expedia spent over US$750 million in technology globally – likely to be the most in the travel industry.
Online travel business is undergoing a change, the way traffic is being converted.
For instance, one of the recent highlights has been TripAdvisor tying up with hotels and OTAs.
So what about China, considering the fact the market has excelled in setting up its own platforms – social networking sites, micro-blogging, a multi-faceted app like WeChat which today even facilitates transactions, wallets such as Alipay etc.
“This (China) market is super-interesting,” says Mieke, referring to the blend of technology and the resulting usage of the same by consumers.
China has its own distinctive way of crafting applications and tools, something that is not always relevant for non-Chinese markets. “If you see Chinese consumers using mobile handsets, you see them “talking” to them – considering the heavy usage of voice-based interaction, rather than users in other markets where one tends to opt for “texting”,” points out Mieke.
She says the voice-based search feature, along with the option of drop-down menu, has been specially tailored for hotels.com mobile app in China.
Expedia is looking at optimizing marketing mix, looking at new payment options other than Alipay and also sharpening hotel content via contracting as well as tie-ups with local OTAs.
Expedia would continue to leverage its global richness in inventory, technology investment and marketing reach, an area that is perhaps the most challenging aspect.
As for payments, it is often highlighted that there are hotels in China, barring 25000-30000 hotels that have a star rating, may not be equipped to support credit card payments.
Mieke mentioned that the industry is a lot more flexible – consumers can use their credit cards and pay Expedia or they can also pay at the property, indicating that Expedia isn’t really sticking to just the agency or the commission model.
Also, the likes of WeChat and Alipay might have their roots in China, but the apps are popular outside China, too, and can be useful for inbound segment, too. This can help in targeting Chinese-speaking users based in other nations, in addition to the diaspora of Chinese natives across the globe.
Overall foreign OTAs have found their way into China via collaboration, but it would be interesting to see if 2016 can result in any meaningful foray as an independent, domestic brand.