Moving towards mobile in the Asian travel market
MovingtowardsmobileintheAsiantravelmarket
Worlwide,mobileinternetisexpectedtodeliver$700bninrevenuesby2017,accordingtomarketanalysts,Digi-Capital,upthree-foldfrom20131.mCommercewillaccountforover$500bnofthiswithafurther$74bncomingfromconsumerapps.Asiaisexpectedtomakeupmorethanhalfoftheglobalmcommercefigurecominginatapredicted$230bn.
Source:Techcrunch2
WithappsgrowinginsignificanceacrossIndonesia,ChinaandthePhilippinesandmobilebeingthedominantmodeofinternetaccessacrossnationssuchasIndia,Indonesia,LaosandSriLanka,amobilestrategyisessentialtoextendreachintothesemarkets.
1http://techcrunch.com/2014/12/06/six-drivers-of-the-700b-mobile-internet/
2http://techcrunch.com/2014/12/06/six-drivers-of-the-700b-mobile-internet/
Source:TopFunded3
Thecountriesaboveareclearlymobilereadybutstillhavecomparativelylowm-commerceratescomparedtoSouthKorea,TaiwanandChinawherearoundathirdofconsumersboughtsomethingonlineviaphoneintheprecedingmonth(surveyconductedQ4,2014).
3http://www.topfunded.com/mobile/indonesia-leads-the-world-in-mobile-app-downloads-sea-mobile-ad-network-2q2015/
Source:WeAreSocial4
ButwhyismobilebecomingsuchanimportantchannelfortravellersintheAPACregion?Certainly,penetrationacrosstheregionasawholeisveryhigh.AffluentAPACnationssuchasJapanandincreasinglyChinahaveindividualswithmorethanonehandset,whilenationssuchasIndiaseeuserswithmobilehavingthisastheironlychanneltoaccessinternetservices.
“PeopletalkaboutAPACasoneentitybutinrealityit’svery,verydifferentthings,”insistsBooking.comAPAC’sManagingDirector,OliverHua.NorthAsianssuchastheChineseandSouthKoreansareverytechsavvyandhavehomegrowntechnologiesandthesupportinfrastructure.BaiduandYahooJapanaresignificantplayers.ButinSouthEastAsia,consumerstendtofollowthetechnologytrendsoftheUSandEurope.SouthAsia–India,SriLankaandBangladesh–isstillamarketthatisinitsveryearlystagesandthere’sabitofamix–realonlinesophisticationandconsumersnotonlineatall.Butthereisgreatpotentialthere.”
4http://wearesocial.net/blog/2015/03/digital-social-mobile-apac-2015/
Source:WeAreSocial5
Thereisnodenyingthatmobileisthemostimportantchannelforconsumers.Butistheconsumermindset‘mobilefirst’?Theanswerissimplerthanthat:
“Travellersaretravellerswhetherforbusinessorleisureandtheirbehavioursaren’ttoodifferent.Theywantserviceproviderstoknowwheretheyare.Theywantinformationwhentheyneedit,theywantitattheirfingertipsandareusedtothisservicefrommanyotherserviceproviders,”statesCWT’sAlvanAiau,VPglobalsalesandprogrammanagement,APAC.
Hyatt’sdirectorofdigitalmarketing,APAC,AndyChang,agrees:“Theyexpectmorecompaniestoprovideuser-friendlyservicesconvenientlyviamobile,digitalandsocialcustomerservices;thosethatdon’trisklookingantiquated.”
Whiletheopportunityissimpletounderstand,isitreallythateasyforcompaniestoaddress?ThevastspreadofdifferentnationswithintheregionissomethingChangseesasaparticulartechnicalissue:
5http://wearesocial.net/blog/2015/03/digital-social-mobile-apac-2015/
“Manyhotelcompanies’digitalplatformshavelocalizationissues;sinceI’minAsiaPacificIseealotofUXproblems,particularlyinChinawherethetechnicalecosystemandUXnormsaredifferent.Hotelcompaniesalsousemanydifferent3rdpartybackendsystemsthatdon’talwaysplaynicetogether,anddigitalplatformsrelyonthemtofunctionproperly.However,someofthesesystemsarebasedonolder,closedarchitectureratherthanthemoreopen,API-drivenarchitectureoftoday.”
Respondingtotheconsumertrend
It’sclearthatalargevolumeoftransactionsworldwidearemovingonlineandthemobileplatformisamajorcontributortothattraffic.Asaresult,travelcompaniesfromhotelierstoairlinesarehavingtoadapthowtheytarget,communicateandservethismobile-firstcustomerbase.
“Manycustomersarestartingwiththesmartphoneastheirnumberonedevice,especiallyinSouthEastAsia.Wehavemanysolutionsthatarebuiltspecificallytobemobile-first.Speedisveryimportant,asisuserexperienceandconvenience.Localisationandpersonalizationhavealreadybecomeprerequisites.However,manycompaniesarenotmobile-firstandaretryingtoadaptdesktopsolutionstomobile,squashingthatlargeexperienceontoamobileplatform.Thisiswhereyoucanhavehiccups,”statesTomasLaboutka,CEOandco-founderofHotelQuickly.“DoIofferthecustomerendlesslists?DoIwanttoforcethemtoswitchtoanapp?IfI’matravelleronthego,whatamIlookingfor?Smartphonesareinstantandtransactional.”
ThemostdigitallynativesegmentofAsiantravelersstartswithyoungerconsumersandmillennialswhosedefaultsettingismobile.Lowcostcarriers(LCCs)inparticularhavenotedandadaptedtheirpropositionstosuit.Manyofferdigitalsolutionstotheformerlypaperandperson-basedairtravelinteractionsincludingbooking,check-in,mealandseatchoiceandloyaltyprograms.Malaysia’sAirAsiaLCCoffersthetraditionalsuiteofonlineoptionsbutwasalsothefirstintheworldtoofferSMSbooking6.
SocialmediaisofvitalimportanceintheAsianmarket,particularlyacrossChinawhereitisusedformorethanjustswappingpicturesandhavingconversations.Forexample,inassociationwithin-cartelematics,itisusedtodiscusstheseverityoftrafficjams.ChineseNewYear2015sawthetraditionalexchangeofredpacketsgovirtualasmorethan1bnofthegiftsofmoneywereexchangedovertheWeChatapp7.
“Wehavedonealotofresearchandthoughtabouthowwewanttousesocialreviewstohelpourcustomers.CWT'sHotelIntelisareviewtoolthatallowstravellerstoprovidefeedbackratingtheirexperience.Seeingwhetheracertainhotelisacolleague'sfavouritehasbeenapowerfultoolforcorporatetravellersandfromtheprocurementperspectiveaswell,”Aiaunotes.
WeChatandLineareincreasinglybeingusedbytravelbrandstointeractoneononewiththeircustomerssuchasKlook(seebelow).Touristdestinationshavealsoengagedwiththeplatformwiththe6http://genctraveller.com/2015/01/7http://www.scmp.com/comment/insight-opinion/article/1758826/how-mobile-messaging-apps-are-changing-social-behaviour-asia
MacauGovernmentTouristOfficeattractingover500followersjustsixdaysaftergoingliveandthetourismbureauxofChongqing,Suzhou,TaishanandHongKonghavealsojoinedtheparty8.Injustfouryears,WeChatnowhasthreetimesthenumberofmonthlyactiveusersthanSinaWebohoweverthedifferenceinhowtravelbrandsmightexploitthisusageisstark.
“It’shardtosayinChinawhyconsumerspreferappsovermobileinternet.Connectivityissuesmayplayapart.AppscertainlytakeoutalotofintermediationandmobileadsonGooglebecomealotlessviableifyouwanttoreachtheappconsumer,”Huasays,adding:“DespitethefactthatourbrandislesswellknowninAPACthanEMEA,stillalotmoreconsumersuseourappsinChinathantheydoinmoreestablishedwesternmarkets.”
Certainlythereisanincentiveforindividualhotelierstodevelopastrongappstrategyasaloyaltyplay:
“Morepeoplebookingonmobileandthedesiretokeepmoreguestsbookingonproprietarychannels.OTAshavemuchlargermarketingbudgetsthanhotels,buthotelsstillownthehotelexperience.Ifhotelscangetgueststousetheirbrandedappsduringthestay,thereisahigherchancetokeepusersonproprietaryplatformsforfuturebookings,”Changsays.
TheDaily9arguesthatSInaWeibohasfargreater‘brandreach’thanWeChatwithanaveragepersonalcarebrandpostreaching212timesthenumberofusersonWeChat.Howeverascanbeseenfromthetablebelow,SinaWeiboappearstobeusedforconsumingcontentwhileWeChatisusedforproactiveinteraction.Thisiswhytravelbrandsarewellplacedtouseitasacommunication,serviceandbooking/paymentstool.
8http://skift.com/2014/03/19/why-travel-brands-need-to-be-on-chinas-wechat/9http://www.l2inc.com/wechat-has-yet-to-prove-brand-reach/2015/blog
Source:TheDaily10
Thetrendtowardsinvestmentinmobile
StartupswithaheavymobilefocusarecontinuingtoattractinvestmentwhileestablishedplayerssuchasBooking.comaredevelopingseveralapproachestocapturingthemobiletraveler.Mcommerceoverallattracted$4.2bnofthetotal$19.2bnprivateinvestmentintomobileinternetstartupsin2013/14withtravelandtransportaccountingforafurther$3.3bn.
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HongKong-basedKlookadded$5mSeriesAfundingtoits$1.5mseedroundacross2015.Thecompanyoffers1,200travelactivitiesin24countriesacrossAsiaandclaims500,000usersacrossitswebsite,appandWeChatchannels.Theinvestmentwillbespentongrowingdestinationsaswellasdevelopingitstechnologyandmarketingtheservice11.
10http://www.l2inc.com/wechat-has-yet-to-prove-brand-reach/2015/blog11http://techcrunch.com/2015/10/16/klook-an-app-for-booking-travel-activities-across-asia-raises-5m/
ChinesebookingsiteTuniuhasseeninvestmenttotaling$148mattheendof2014whichatthetimeitwasclaimedwouldbespentonextendingintolower-tierChinesecitiesandimprovingitstechnologies12.Oneoftheinvestors,JD,isalsoarivalandanalystssuggestthismaybeconsolidationinthemarketplace,particularlyinviewofcompetitorAlibaba’sstrength.ItisworthnotingthattheproportionofAlibaba’smobilesalesswungfromlessthan10%in2013to42.9%in2014.Itwouldbesurprisingifalargeportionofthat$148minvestmentwasnotfocusingonmobile.
Largerincumbentsarealsolookingtochallengethemobilestartups.Booking.com’snewlast-minuteapp,BookingNowwaslaunchedinJanuary2015toallowcustomersonthegotomakerapidroomchoicesandbookusingasingleclickviamobileoncedetailsarestored13.AnalystssuggestthatthismayprovetobeakillerappforsmallercompetitorssuchasHotelTonight.InApril2015thecompanyalsolaunchedBookingSuite,aB2Btechofferingthatallowshotelownerstoquicklyandcheaplycreatebespokewebsitesthatare,critically,mobileoptimized14.
BookingSuite'snewestproduct,WebDirect,isforBooking.compartnerswhowantasophisticatedwebpresencewithminimaleffortandnofinancialrisk.WebDirectcustomersonlypaywhenareservationismadethroughtheirbookingengineandresultsinastaybyguests,makingWebDirecteffectivelyrisk-free.Therearenootherfeesorcharges.
"BookingSuitepropertywebsitesrepresentagreatleapforwardfortheindustry,saidRobRansom,DirectorofBookingSuite."Forthefirsttime,accommodationprovidersinallregionsoftheworldcanbenefitfromahigh-qualityonlinepresencewithnofinancialriskandnooperationalandtechnicalheadaches.BookingSuiteeliminatestimeandresourceswastedwithtraditionalwebsitedevelopmentandmanagement,enablingpartnerstobenefitimmediatelyfromastrongonlinepresence."
Booking.comsignaledtheneedforanaggressivemovetowardsprioritizingmobileinits2014annualreportwhereitwasnotedthat:“Ourmajorcompetitorsandcertainnewmarketentrantsareofferingmobileapplicationsfortravelproductsandotherfunctionality,includingproprietarylast-minutediscountsforaccommodationreservations.Ifweareunabletocontinuetorapidlyinnovateandcreatenew,user-friendlyanddifferentiatedmobileofferingsandefficientlyandeffectivelyadvertiseanddistributeontheseplatforms,orifourmobileofferingsarenotusedbyconsumers,wecouldlosemarketsharetoexistingcompetitorsornewentrantsandourfuturegrowthandresultsofoperationscouldbeadverselyaffected.”
Combinedwiththeaggressivegrowthinmobileandmcommerceuseintheregion,thisstatementfromBooking.comunderlinesabasicunderstandingfortravelcompaniesintheAPACregion:Everytravelcompany,regardlessofsize,mustbemobileoptimizedbothintermsofsalesandservice.
12https://www.techinasia.com/ctrip-jd-invest-148m-chinese-tourism-booking-site-tuniu/13http://www.wired.com/2015/01/booking-now/14http://www.prnewswire.com/news-releases/bookingcom-launches-bookingsuite-introduces-new-groundbreaking-websites-for-property-owners-300070522.html
Whatgoodlookslike
Beingoptimizedintermsofsalesandserviceisn’tsimplyaboutinvestinginamobileoptimizedsiteorapp.Goodcustomerexperienceontheplatformisvitaltobothacquisitionandretention.Thismeansjoiningupchannelsbeyondmobile.Oneofthemostsignificantimpactsofmobileinthelastfiveyearshasbeentoreinvigorateboththeemailandcallcentrechannels.
MostemailisnowopenedonmobileworldwidewiththisprovingdoublysointheAPACregion.Throughemailistheincreasinguseof‘ClicktoCall’necessitatingimprovementsintravelcallcentrehandling,CRMsystemsthatareabletofeedthroughmobileandinternetcustomeractivitytoagentsinrealtime.Increasinglythereistheuseof‘Clicktochat’orbrandpresencesonIMchannelssuchasWeChatabove.
“Peopleintheregionlovetochat.Wehavebuilt-inchatmessagingaswellastalkingtousoverthephone.Speedreallymatters.Weneedtocutallthequestionsoutsothecustomercanhaverealconfidence.Youcan’thaveresponseratesinamatterofdaysorburythecontactdetailsonpage75.Otherwise,thecustomerjustwalksaway,”saysLaboutka.
“Today’sbusinesstravellerhasaccesstoamultitudeofappsbutatCWTwewanttomakesuretravellerscanaccessinformationfromasinglesource;frommanagingtheirtravelprofile,bookingahoteltocheckinginforflightsorstayingupdatedwithflightalerts.WithourmobileappCWTToGo™,weputreal-time,secureinformationattravellersfingertips.Butwhensomethinggoeswrongyouwanttobeabletotalktosomeonesowearecurrentlylookingataclicktocallfunctionandperhapsvideoconferencing.Technologyisimportantbutwemustrememberit’saboutfusingtechnologywithservice,tomeetcustomerneeds,”Aiauwarns
Socialmediaasadirectresponsecustomerservicechannelisbothavitalandpolarizingexperience.Customersaredelightedifbrandsrespondwelloversocialmediabutcanbeleftdisproportionatelydisappointediftheirqueryorcomplaintgoesunremarked.
“TravellersinAPACaremuchmoreengagedingettinginformationandsharingcontentthaninotherpartsoftheworld.Thereisahugemarketaroundusergeneratedcontentrecommendations.Asianusersdorelymoreonreviewsandpeertopeercommunications,”saysBooking.com’sHua.
Theabilitytobereactivetakesmarketersawayfromthetrendtowardsmarketingautomationthatisgoverningtheadvertisingandpersonalizationonline.Socialdemandsadegreeofhumaninteractionandwiththeinsistenceonrapidresponserates,brandsneedtounderstandtheinvestmentrequired:
“Thechallengescalesupwithlocalization.Socialmediaplatformsdifferfromcountrytocountry.WhatispopularinThailandisnotinHongKongandthat’swhenyouhavetothinkaboutteamdynamics.Havingsomeonetocoordinateisessential,asisbeingresponsive.Leavingacommentunansweredwillbackfire.Thefeelforpersonalinteractionisimportant.Theinterestingcombinationishavingsocialmediamergewiththedirectcustomercontactpoints.Thereareeconomiesofscaletobehad,”Laboutkareveals.
Gettingitrightonmobilestillrequiresalotoftrialanderror.Marketersunderstandthatappsarevital,forexample,butthey’renotentirelysurewhythisis.Heconcludes:“It’sabitofanart,ratherthanascience,gettingappinstalls.ButfindingtheROIisascience.Theresultsarequitemixedatthemoment,wehaveyettocrackthecode.Someconsumerbehavioursaregeographyspecific–whatworksfortheJapanesecustomerwillnotfortheChinese.Mobileappsaredifficulttopromote.Unlikeshopping,travelisusedonceortwiceayear.Butperhapstheanswerisinmakingthetravelappcompatiblewithother,biggerapps,suchaschat.”
MobileisavastopportunityfortravelbrandsintheAPACregion.Thesheervolumeofusersisahugecontributoryfactortothenecessityofitbeingattheheartofanybrand’smultichannelstrategy.ButsimplyunderstandinghowtheplatformismouldingconsumerbehaviorandsocialinteractionsmeanstravelbrandsmustharnessitiftheyareeventoentertheAsianconsumer’sworldatall.
