One of the most-discussed differences between Chinese and Western apps is the generalist vs. targeted approach to service bundling. Dan Grover touches on this in his much-applauded 2014 analysis of mega-app WeChat:
The latest trend in US apps is splitting apps into “constellations” of ever-more-focused and minimalist task-driven apps … . But apps [in China] have been tugged in the opposite direction.
Every app has accumulated more and more features seemingly unrelated to their ostensible purpose — sometimes cleverly integrated, sometimes strapped on arbitrarily — in what I can only imagine are bids to make each app retain eyeballs and work its way into more users’ daily habits.
There’s another simple reason for the feature-stuffing beyond competition for user numbers: when you operate on a resale-platform model, the more sales channels you can cram onboard, the more money you take in.
China’s travel portals are prime examples of the more-is-more approach to service offerings. While western outlets like Expedia and Kayak focus almost exclusively on bookings and reservations, China’s travel champions serve as more of a one-stop-shop for all things tourism. Big players like CTrip 携程, Qunar 去哪儿 and Fliggy 飞猪 have extended their offerings along other verticals, moving into retail, financial, telecom and niche-market services.
Those offerings give us a little insight into both how China’s digital travel industry functions, and how a deeper understanding of cultural market needs can inspire new sales channels.
Destination wedding photography
Case in point: Booking portal Tuniu 途牛’s recent launch of Tuniu Lvpai 途牛旅拍, a marketplace for destination wedding photography services.
Chinese weddings follow a format that has little in common with your basic Julia Roberts movie. There’s no walk down the aisle, no church, and no vows. Instead, modern ceremonies revolve around two core components: the food and the photography.
In her documentary “China Love”, Olivia Martin-McGuire’s explores the sociopolitical origins of wedding photo shoot culture and the booming industry that has sprung up around the trend (SCMP):
The phenomenon has become big business. [Martin-McGuire] cites figures from a China Wedding Industry Development Report that estimated US$80 billion was spent on weddings in 2015, up from US$57 billion four years earlier. Couples were typically spending between 20 per cent and 25 per cent of their nuptials budget on photo shoots, according to the report.
… “Every couple marrying in China will take part in a pre-wedding shoot up to one year before the actual ceremony,” Martin-McGuire adds. “The day involves several costume and backdrop changes, where you can become a character in any fantasy you choose. In more exotic locations, couples will pay up to US$250,000 for the shoot.”
… Martin-McGuire explains that the images are not only intended to be a record of the marriage, but more importantly, proof of the love, romance, freedom and financial resources.
As international travel becomes increasingly attainable for Chinese citizens, more couples are traveling abroad to tie the knot (SCMP):
The other major trend … is destination weddings. Bali has been a popular choice for tying the knot in paradise since actress Yang Mi and husband Hawick Lau married there in 2014. More recently, Europe has become more popular with Chinese couples.
“Destination weddings are really booming. This are popular because it means you can invite fewer guests, usually fewer than 50 guests, to your wedding in Italy, Spain or France.”
The potential isn’t lost on China’s travel industry. Tuniu is milking the cash cow with a single day running anywhere from RMB 7,999 (USD $1200) to RMB 30,000 (USD $5,000) and up.
“Freestyle” vacation packages
“Chinese travel” once conjured up images of retirees in matching hats shuffling in and out of Harrod’s en masse. While group tours are still popular with the over-40 set, they’ve lost ground with Millennials and Gen Zs, who are increasingly ditching the crowds in favor of independently-directed travel.
We saw the beginnings of this sea change back in 2010 with the emergence of startup Mafengwo 马蜂窝, China’s first platform aimed at younger travelers keen to take a hands-on, a la carte approach to itinerary construction.
Mafengwo is now facing competition from newer startups like Qiongyou 穷游 (a cheeky name meaning “poor man’s travel”) and Kelu 客路 (English name: Klook), experiential platforms targeted at adventurous youth with less disposable income who are willing to do their own planning.
But while passive consumption of the travel experience has lost much of its appeal, the convenience and cash savings of package booking hasn’t. The next step in the industry’s evolution has come in the form of unguided, partially-inclusive vacation packages, a sales structure that’s been prevalent in the western travel market for some years.
Freestyle sits squarely in the middle of all-inclusive group tours and a la carte products, and might include any combination of flight, hotel, airport transfer and day trips. The proof of popularity is in the UI pudding: many providers have restructured their interfaces to distinguish between all-inclusive and freestyle packages.
Freestyle on Qunar
Freestyle on Ctrip
Freestyle on Tuniu
Over the last couple of years, portals have struck up partnerships with local financial institutions to experiment with new fintech models for the travel industry, including fixed-term investments and lending.
The collaborations are a boon for China’s financial institutions, many of whom have poor web presence, and face challenges drumming up new customers via digital marketing. They also make travel accessible to those users who can afford monthly payments but not a lump sum outlay on larger trip expenses.
Tuniu looks to be going wide on the fintech front, with the most robust on-platform suite of offerings.
Some of those products are specifically aimed at the travel market. In 2018, for instance, Tuniu partnered with China Construction Bank to release the Tuniu Dragon Card 途牛龙卡, offering card holders reduced rates on foreign currency exchange, preferential travel insurance packages and other member benefits. As of January 2018, over 2 million cards had been issued.
Some aren’t quite so on-brand: the platform also hosts a collection of general-purpose funds, gift cards, and fixed-term accounts, taking advantage of the target market overlap between travelers and potential investors.
Investment fund listings on Tuniu
Fliggy is a unique case: as part of the Alibaba ecosystem, the company is intimately linked with Ant Financial and Sesame Credit, and thus has access to user financial history and credit data.
While Fliggy doesn’t offer on-platform financial products, travelers whose Sesame Credit score is over 600 points can book Fliggy flights and hotels on a “buy now, pay later” basis.
In addition to credit cards, CTrip Finance also extends lines of credit that can only be used for airline ticket purchases and hotel reservations made via its own platform.
Users scan QR codes to apply for credit via their mobile device
Travel platforms have partnered with China’s largest telecoms, doubling as resellers of cellular roaming packages, SIM cards and pocket wireless hotspot device rentals, allowing outgoing travelers to sort their data roaming alongside their plane ticket.
Pocket hotspot rental via CTrip
Though countries like Turkey, Thailand, and Indonesia have cashed in on the tourism boom by streamlining travel visa issuance for Chinese citizens, many desirable destinations like Japan, Australia and the US still require a multi-step application process that involves submitting proof of income and employment and undergoing a short in-person interview.
The paperwork can be off-putting to less experienced travelers, many of whom prefer to hire a visa agent to talk them through the form collection and submissions, and in some cases stand in line for them at embassy interview appointments. Portals skim a few yuan off the top via third-party agency listings.
322 agencies list U.S. visa application services on Qunar
Rather ironically considering their lack of movement in the field, back in 2013, Expedia Group dropped a press release outlining the results of a study on vacation package purchase paths which linked travel buying with an uptick in retail consumption (Expedia):
Retail and Travel Site Consumption Patterns Align: In the 45 days leading up to a package booking, retail sites were visited almost as frequently as travel sites. Vacation bookers visited retail websites 36.6 times in the 45-day path to purchase period, while travel sites were visited 38 times. During the week of booking, however, retail site visitation dropped while travel site visitation peaked. By leveraging a travel site partnership, a retail brand could potentially remain top of mind for consumers throughout the entire 45-day period.
CTrip and Tuniu have been less negligent in pouncing on the opportunity, branching into retail with the launch of online marketplaces that exclusively stock travel products and accessories.
CTrip incubated the concept via its CTrip Points Mall, which got its start as a loyalty rewards merchandising feature, but blossomed into full-scale e-commerce platform Xiecheng Youpin 携程优品 in mid-2018, selling both self-designed and partner-brand products.
- Piggybacking on partnerships with local firms has always been one of the most reliable pathways to China market entry. New retail and service channels on tourism platforms can offer foreign firms — even those not affiliated with the travel industry in their own markets — new potential channels through which to reach Chinese users.
- We say it all the time, but we’ll say it again: Chinese firms can pinpoint and develop potentially hot service offerings like destination wedding photography because they understand the cultural needs of their market. You cannot innovate in China if you don’t know your user base. Do your research.
- 易观: 2019中国在线旅游市场年度综合分析
- SCMP: China Love documentary explores the country’s pre-wedding photo shoot industry
- SCMP: Three high-end Chinese wedding trends: quality, customisation and destination weddings
- China Daily: “途牛龙卡”发卡量超200万张 途牛携手建行探索“金融+旅游+X”新模式
- Sina Finance: Three high-end Chinese wedding trends: quality, customisation and destination weddings
- Sina Finance: 携程优品瞄准行前“痛点” 转型旅行用品自营电商