Roy Graff Managing Director ChinaContact www.chinacontact.org The state of on-line travel in China

Roy Graff Background: Expertise on China business and culture, speaks fluent Mandarin. Lived for 3 years in Beijing and Shanghai, travelled extensively to China's major cities, forging good personal relationships with key private industry leaders and public officials. Served as China Director of E-commerce for Gullivers Travel Associates, overseeing all aspects of the company's electronic product distribution in China. Final role in China as Octopustravel.com Country Manager. Consultant on China to tourism promotion bodies, hotel chains, online companies and tour operators. Investing in online travel and e-commerce business with Chinese partners.

Roy Graff

Background:

Expertise on China business and culture, speaks fluent Mandarin.

Lived for 3 years in Beijing and Shanghai, travelled extensively to China's major cities, forging good personal relationships with key private industry leaders and public officials.

Served as China Director of E-commerce for Gullivers Travel Associates, overseeing all aspects of the company's electronic product distribution in China.

Final role in China as Octopustravel.com Country Manager.

Consultant on China to tourism promotion bodies, hotel chains, online companies and tour operators.

Investing in online travel and e-commerce business with Chinese partners.

Online penetration Broadband infrastructure in all major cities Travel trade penetration good. Consumer penetration rising fast (80% increase) soon to overtake USA Baidu main search engine in China, not google Finance system still limiting e-commerce c

Broadband infrastructure in all major cities

Travel trade penetration good.

Consumer penetration rising fast (80% increase) soon to overtake USA

Baidu main search engine in China, not google

Finance system still limiting e-commerce

Online information sources are vital

Characteristics of Independent Chinese travellers Middle and high income city dwellers White collar range of income: EUR $10k to $25k Established pattern of business trips combined with leisure holidays Increased awareness of luxury destinations Desire to ‘outclass’ others Prefer convenience and access to range of activities

Characteristics of Independent Chinese travellers

Middle and high income city dwellers

White collar range of income: EUR $10k to $25k

Established pattern of business trips combined with leisure holidays

Increased awareness of luxury destinations

Desire to ‘outclass’ others

Prefer convenience and access to range of activities

On-line travel in China Leading brands enhancing trust in online travel booking (Ctrip, eLong)‏ Market not ready for pure online booking model Disjointed banking system and fear of fraud deter online payments Worries about online booking misused for visa applications Customers want physical presence even from an online operator Ctrip shares continue to rise (and it buys traditional travel agencies)‏ Qunar.com secures $10 million investment (but not making any money)‏ Accor provides Chinese language booking engine (only for domestic hotels)‏

On-line travel in China

Leading brands enhancing trust in online travel booking (Ctrip, eLong)‏

Market not ready for pure online booking model

Disjointed banking system and fear of fraud deter online payments

Worries about online booking misused for visa applications

Customers want physical presence even from an online operator

Ctrip shares continue to rise (and it buys traditional travel agencies)‏

Qunar.com secures $10 million investment (but not making any money)‏

Accor provides Chinese language booking engine (only for domestic hotels)‏

Booking online is becoming more important

Why localisation Language differences in Greater China Lack of confidence in foreign languages Chinese search engines Trust in local presence Customer feels important

Language differences in Greater China

Lack of confidence in foreign languages

Chinese search engines

Trust in local presence

Customer feels important

Sources of information for China online travel China Travel Industry Blog http://news.future-of-travel.org ChinaContact Tourism Advice Network http://chinacontacttourism.ning.com China Web 2.0 Review http://www.cwrblog.net/

China Travel Industry Blog http://news.future-of-travel.org

ChinaContact Tourism Advice Network http://chinacontacttourism.ning.com

China Web 2.0 Review http://www.cwrblog.net/

Diller's IAC online conglomerate planning US$100 million China expansion Nov. 23, 2007 BEIJING (AP) - Media mogul Barry Diller said Friday his Internet conglomerate, IAC/InterActiveCorp, will invest US$100 million to expand in China by creating services designed for local users. IAC also will launch its Ask.com search engine in China within two years, Diller told reporters in a meeting over breakfast. IAC is looking for opportunities to develop or buy businesses geared to Chinese users , Diller said. He said it wants to avoid the fate of Internet outfits that have struggled in China with offerings developed for the United States and other foreign markets. «I think what we're going to try and do is completely different than any of the other processes,» Diller said. «I know that we have learned a methodology of starting Internet businesses and relating Internet ideas one to the other and having a different kind of discipline. China has the world's No. 2 population of Internet users after the United States, with 162 million people online. But foreign companies have struggled to win market share. Yahoo! Inc. and eBay Inc. both have turned to local partners to run their China operations. IAC is ready to invest US$100 million (¤70 million) in its new China ventures, according to Diller, its chief executive officer. «We've certainly got enough capital to do damage,» he said. Successful business ideas developed in China might be exported for use in the U.S. market, Diller said. IAC bought a Chinese online travel service, ELong Inc., in 2005. But Diller said it mishandled the business early on and is trying to recover after falling behind Chinese rival Ctrip.com International Ltd. «I think we, in our imperialistic way, made some early dumb decisions and hopefully we're making smarter ones now,» he said.

Diller's IAC online conglomerate planning US$100 million China expansion

Nov. 23, 2007

BEIJING (AP) - Media mogul Barry Diller said Friday his Internet conglomerate, IAC/InterActiveCorp, will invest US$100 million to expand in China by creating services designed for local users. IAC also will launch its Ask.com search engine in China within two years, Diller told reporters in a meeting over breakfast.

IAC is looking for opportunities to develop or buy businesses geared to Chinese users , Diller said. He said it wants to avoid the fate of Internet outfits that have struggled in China with offerings developed for the United States and other foreign markets.

«I think what we're going to try and do is completely different than any of the other processes,» Diller said. «I know that we have learned a methodology of starting Internet businesses and relating Internet ideas one to the other and having a different kind of discipline. China has the world's No. 2 population of Internet users after the United States, with 162 million people online. But foreign companies have struggled to win market share. Yahoo! Inc. and eBay Inc. both have turned to local partners to run their China operations.

IAC is ready to invest US$100 million (¤70 million) in its new China ventures, according to Diller, its chief executive officer. «We've certainly got enough capital to do damage,» he said. Successful business ideas developed in China might be exported for use in the U.S. market, Diller said. IAC bought a Chinese online travel service, ELong Inc., in 2005. But Diller said it mishandled the business early on and is trying to recover after falling behind Chinese rival Ctrip.com International Ltd. «I think we, in our imperialistic way, made some early dumb decisions and hopefully we're making smarter ones now,» he said.

Contact: Roy Graff London, UK Email: info@ccontact.com Tel: +44 20 3239 9688 Mobile: +44 7821 093 199 Consultancy service: market access, marketing strategy, public relations, deal brokering Localisation: tourism marketing materials, websites, press releases Event management: exhibitions, product launches, trade fairs, business trips Representation: China sales and marketing representatives

Consultancy service:

market access, marketing strategy, public relations, deal brokering

Localisation:

tourism marketing materials, websites, press releases

Event management:

exhibitions, product launches, trade fairs, business trips

Representation:

China sales and marketing representatives