Presentation cees bosselaar - phocus wright

October 20, 2010 PhoCusWright The Emerging Online Travel Marketplace in China, India and Brazil ETC e-Business Academy Belgrade October 20, 2010

Country China India Brazil USA UK Population* 1,325 1,149 192 307 62 Internet* 420 50 72 228 46 Internet % 32% 4% 38% 74% 74% Mobile* 770 410 177 286 70 Mobile % 58% 36% 92% 91% 129% Travel $62 B $16 B $20 B $236 B $55 B Book online $11 B $4B $4 B $93 B $26 B Book online % 18% 25% 20% 40% 47% International % 9% 8% 9% 16% 46% * In millions Source: Worldbank, World Development Indicators, PhoCusWright, Nielsen. Figures are rounded. For comparison purpose only. 2 © 2009 PhoCusWright Inc. All Rights Reserved.

Five Cities Were Selected to Represent Different Regions In China Beijing – North China Shanghai – East China Ú Ê Guangzhou – South Beijing China # Xi’an # Chengdu – Southwest # Chengdu Shanghai China # Xi’an – Northwest China Guangzhou 5 © 2009 PhoCusWright Inc. All Rights Reserved.

Comprehensive Approach to Research • First Chinese consumer travel behavior study • Qualitative research coupled with quantitative research o Focus groups – 10 focus groups across key market segments o In-depth interviews – 15 in-depth interviews across key market segments o Quantitative survey – More than 2,000 respondents interviewed face-to-face across key market segments • Regional representation o Five cities selected: Beijing, Shanghai, Guangzhou, Chengdu and Xi’an, for representation of different regions in China • Comprehensive analysis 6 © 2009 PhoCusWright Inc. All Rights Reserved.

China Has the Most Internet Users in the World – More Than 300 Million People China Internet Penetration 300 20% More than 84% 19,1% of the Chinese 16,0% population using 200 15% 12,3% Internet services 10,5% have broadband 9,4% 100 8,5% 10% 7,9% access; this is 214 million 103 111 123 137 162 210 253 0 5% subscribers. jun-05 dec-05 jun-06 dec-06 jun-07 dec-07 jun-08 Internet Users in Mn Internet Penetration Source: China Internet Network Information Center Survey, July 2008 7 © 2009 PhoCusWright Inc. All Rights Reserved.

China Has the Most Wireless Subscribers in the World China Telecom Growth – 2001-2010 (Millions) 700 641 600 547 500 461 393 400 335 300 270 206 200 368 366 145 350 341 312 263 100 180 214 0 2001 2002 2003 2004 2005 2006 2007 2008 Wired Subscribers Wireless Subscribers Source: China Internet Network Information Center Survey, July 2008 8 © 2009 PhoCusWright Inc. All Rights Reserved.

Chinese are extremely active in social media: • Blogs: 221 million • BBS: 117 million users (Tianya, Xici) • Social Networks: 176 million users • However, the social media landscape shows different players: Facebook => Xiaonei LinkedIn => Wealink YouTube => Tudou Twitter => Fanfou Flickr => Yupoo • Facebook, Orkut and Twitter are blocked 9 © 2009 PhoCusWright Inc. All Rights Reserved.

Respondents Who Travel Internationally are a Small Portion of the Total Sample Holiday Trips by Destination 100% 100% Any (1+) 90% Frequent (3+) 80% 70% 60% 50% 52% 40% 30% 33% 20% 14% 10% 7% 5% 9% 0% 0% Local Domestic Macau / Hong Kong International Note: TB03: Of all of these holiday trips, how many were taken: Number of Respondents: N – 2057 Source: PhoCusWright’s China Consumer Travel Report 10 © 2009 PhoCusWright Inc. All Rights Reserved.

Southeast Asia is Most Popular Destination for Outbound Holiday Travel in China Top 10 Travel Destinations – International Korea 3% France 4% Canada 4% Australia 4% U.K. 6% Malaysia 8% U.S. 9% Thailand 18% Japan 20% Singapore 22% Note: TB09: Please name up to 3 destinations (locally, domestically and/or internationally) you visited on holiday travel in the past 12 months. Number of Respondents: N – 195 Source: PhoCusWright’s China Consumer Travel Report 11 © 2009 PhoCusWright Inc. All Rights Reserved.

•International travel is state-regulated. The Chinese government categorizes international destinations • Travel to countries with an Approved Destination Status (ADS) requires fewer state agency approvals. •International travel must be purchased from government- approved offline travel agencies. Source: PhoCusWright’s China Consumer Travel Report 12 © 2009 PhoCusWright Inc. All Rights Reserved.

Use of Offline Methods to Search for Travel Information Continues to Exceed Online Methods 80% 70% 70% 59% 60% 53% 50% 50% 40% 35% 35% 30% 19% 20% 14% 10% 0% 1% 0% Online Offline Air Tickets Hotels Travel Packages Train Rented Car Note: HP02: When you planned or gathered information for your holiday travel in the last 12 months, how did you research any of the following travel components? Number of Respondents: N – 2057 Source: PhoCusWright’s China Consumer Travel Report 14 © 2009 PhoCusWright Inc. All Rights Reserved.

More Younger People Used Online Methods for Search, Showing Promise for Online Travel 60% Air Tickets Hotels 50% 48% 45% Travel Packages 43% 42% Train 40% 34% 34% 30% 25% 22% 20% 19% 19% 17% 15% 15% 14% 10% 8% 7% 0% Younger DINK Family Empty Nester Note: HP02: When you planned or gathered information for your holiday travel in the last 12 months, how did you research any of the following travel components? Number of Respondents: N – 2057; Young – 415, DINK – 610, Family – 596, Empty Nester – 436 Source: PhoCusWright’s China Consumer Travel Report 15 © 2009 PhoCusWright Inc. All Rights Reserved.

Ctrip is Dominant in Travel Search, While Baidu is Way Ahead of Google but 7Days Inn is Third for Hotel 41% baidu.com baidu.com 45% 35% ctrip.com ctrip.com 30% 27% airchina.com.cn 7daysinn.cn 17% 18% google.cn google.cn 16% 14% elong.com elong.com 15% Air 9% qunar.com sina.com.cn 6% Hotels 8% kuxun.cn kuxun.cn 6% 6% mangocity.com homeinns.com 6% 5% sina.com.cn sohu.com 4% 4% cs-air.com qunar.com 3% Note: HP05: What were the top three Web sites you used the most for investigating air tickets and/or hotel/guesthouse accommodations for your holiday travels in the last 12 months? Number of Respondents: Air - 714, Hotel - 724 Source: PhoCusWright’s China Consumer Travel Report 16 © 2009 PhoCusWright Inc. All Rights Reserved.

About One-fifth Of Respondents Looked for Online Travel Reviews; A Considerable Share As Travel Reviews Are Relatively New To Chinese Travel Marketplace Yes 19% No 81% Note: HBB21: Do you usually look for any online travel reviews or experience-sharing when deciding to purchase air tickets and accommodations for holiday travel? Number of Respondents: N – 2057 Source: PhoCusWright’s China Consumer Travel Report 17 © 2009 PhoCusWright Inc. All Rights Reserved.

Travel Reviews Have a Strong Influence Over Decision to Purchase Travel Components Influence of Travel Reviews Not very strong 11% Not strong at all 2% Somewhat strong 64% Very strong 23% Note: HBB23: How much influence do you think the travel reviews have over your decision when purchasing travel components? Number of Respondents: N – 391 Source: PhoCusWright’s China Consumer Travel Report 18 © 2009 PhoCusWright Inc. All Rights Reserved.

Among All Factors Affecting Offline Travel Purchases for Air and Hotel, Word Of Mouth Had Most Importance; This Underscores the Need to Build Efficient Social Networking Platforms Travel Buying by Channel Importance of Word of Mouth 30% 46% 47% 70% 25% 53% Air Hotel Online Offline Air Hotel Source: PhoCusWright’s China Consumer Travel Report 19 © 2009 PhoCusWright Inc. All Rights Reserved.

In China There is a Huge Difference in Travel Planning and Travel Buying Behavior Travel Planning Lead Time 40% 36% China Shanghai 30% 28% 31% 28% 21% 20% 19% 12% 10% 12% 9% 2% 0% 1-3 Days 4-7 Days 8-14 Days 15-28 Days 29 Days and more Note: HP07: What was the lead time you typically took to plan and search for travel? Source: PhoCusWright’s China Consumer Travel Report 20 © 2009 PhoCusWright Inc. All Rights Reserved.

Frequency of Trips Differ by Region Guangzhou = Travelholics 100% Mean # of Trips 29% 80% Xi'an 2,92 48% 52% 60% 89% Chengdu 3,58 99% 40% 71% Guangzhou 5,18 49% 48% 20% 2% 1% Shanghai 2,37 11% 0% Beijing 2,6 Total 3,32 Frequent (3+) 2 Trips 1 Trip 0 2 4 6 Note: TB01: How many holiday trips did you take in the last 12 months? Note: Totals may not add to 100% due to rounding Number of Respondents: N - 2057: Beijing - 405, Shanghai - 420, Guangzhou - 410, Chengdu - 408, Xi’an - 414 Source: PhoCusWright’s China Consumer Travel Report 21 © 2009 PhoCusWright Inc. All Rights Reserved.

More Respondents in Guangzhou Used Online Methods to Search for Travel Information Than Other Cities 70% 65% 60% 54% 50% 45% 44% 41% 40% 37% 30% 30% 26% 27% 23% 20% 21% 19% 19% 20% 16% 12% 10% 8% 4% 2% 3% 0% Beijing Shanghai Guangzhou Chengdu Xi'an Air Tickets Hotels Travel Packages Train Note: HP02: When you planned or gathered information for your holiday travel in the last 12 months, how did you research any of the following travel components? Number of Respondents: N – 2057; Beijing - 405, Shanghai - 420, Guangzhou - 410, Chengdu - 408, Xi’an - 414 Source: PhoCusWright’s China Consumer Travel Report 22 © 2009 PhoCusWright Inc. All Rights Reserved.

Taobao is the Biggest Player in the China C2C Marketplace; Has a Market Share of Over 80% Taobao is stepping into travel distribution, with airlines like Hainan Airlines opening shops on the online retail site. Other players in the C2C space are Dangdang.com and Joyo.com, which is owned by Amazon. Source: China Internet Network Information Center Survey, July 2008 24 © 2009 PhoCusWright Inc. All Rights Reserved.

China Travel Marketplace – Key Findings • The China travel market is huge! However… • International travel is state-regulated. In addition, international travel must be purchased from government-approved offline travel agencies. • International travel only counts for 9%, mostly to Asian destinations . UK gets 6% of these international travelers. • 80% of travel is sold by traditional (offline) travel agencies • Most travel searches are offline. Online bookings for international travel = 0% • Air segment dominated by three state owned carriers (Air China, China Eastern Airlines, China Southern Airlines). • Social Media is huge and growing but very different than in the West 27 © 2009 PhoCusWright Inc. All Rights Reserved.

Key Characteristics of Two Emerging Markets in Asia – China and India Characteristic China India Completely Airline Market Highly Regulated Deregulated Deregulated but Lodging Market Deregulated Construction Highly Licensed World Class; Highly Airport Infrastructure Poor; Developing Developed Road Infrastructure Excellent Poor Broadband Penetration High Very Low Credit Card Penetration Good Poor Source: PhoCusWright’s China Consumer Travel Report 29 © 2009 PhoCusWright Inc. All Rights Reserved.

Key Characteristics of Two Emerging Markets in Asia – China and India Characteristic China India Global Distribution All Global GDSs Are Monopoly Systems Operational in India Airline Ownership Government Private Travel Retailing Chain Regulated Deregulated Very Low; Less Than LCC Airline Penetration High; More Than 50% 2% Touchless Low; Around 5% Very High; Around 80% Transactions – Air Travel Management Chinese Global Culture and Practices Source: PhoCusWright’s China Consumer Travel Report 30 © 2009 PhoCusWright Inc. All Rights Reserved.

Methodology First Indian consumer travel behavior study Multi-prong approach • Telephone interviews • In-person interviews • Email surveys September – November 2007 • PCWI-developed survey with critical client input Total sample = 2,524 Participant criteria • 18+ adults • Primary earner in SEC A1, A2 or B1 classifications • Have traveled on holiday by A/C train, air or car/van in the past 12 months Quotas: • Past 30 day email/Internet vs. non email/Internet user (48%/52%) • Domestic vs. International travel (78%/22%) 32 © 2009 PhoCusWright Inc. All Rights Reserved.

Social media a new phenomenon in India but taking off very fast. • Orkut and Facebook: 20 million users • Orkut and Facebook: 90% of total social media sites • 70% of internet users visited social Networks sites • 5% of all users on YouTube are from India (globally ranked fourth) • Social Media will be mobile based (except perhaps in urban areas) • the number of mobile social network users in India is expected to reach around 72 million by 2014 • Introduction of 3G, “cheap” smartphones, innovative data tariff pans, reduction in data charges 35 © 2009 PhoCusWright Inc. All Rights Reserved.

Almost 4 in 10 Don’t Know How/Have Interest in Using PCs or Internet Top 3 Factors* Preventing (More) Online Purchasing Not Interested/No Use for Total Do Not Trust/Not Reliable/Secure Don’t Know How to Use Internet/PC 12% 6% Lack Facilities (Not Connected/Do 37% Not Own Computer/Credit Card) 27% Too Much Time Required/Difficult/ Inconvenient to Use 9% 5% Easier To Do Myself/Through Others Prices Too High/Not Able Negotiate 3% 6% Misc. 2% Don’t Know/Refused Base: Holiday travelers Note: (HBB10) What will prevent you from purchasing your holiday travel online or online more often? *Reflects “Total Mentions” Source: India Travel Marketplace: Technology and Transformation 36 © 2009 PhoCusWright Inc. All Rights Reserved.

Top International Destinations International Destinations Visited (Past Year) (TOTAL MENTIONS) % Trips Taken, by Continent % Trips Taken, by Country/City Oceania Singapore (23%) Dubai, Malaysia (each 11%) N. America England/UK/London (9%) Europe Bangkok (5%) Asia Nepal (5%) Africa Europe, Australia (each 4%) 0% 20% 40% 60% 80% Hong Kong, New York, Thailand (each 2%) Base: International Holiday Traveler Note (TB6-1) In the past 12 months, what three countries or destinations have you visited/traveled to on holiday? Source: India Travel Marketplace: Technology and Transformation 37 © 2009 PhoCusWright Inc. All Rights Reserved.

Market Share by Channel Increase in Online Agency Share at the Cost of Traditional Agencies 2007 2007 2010 15% 15% 10% 27% 29% 27% 61% 58% 58% Supplier OTA TTA Supplier OTA TTA Source: PhoCusWright Inc. 39 © 2009 PhoCusWright Inc. All Rights Reserved.

India Travel Marketplace – Key Findings • The India travel market is huge! • Chaotic growth, not regulated • International travel only counts for 9%, mostly to Asian destinations . But no limit to growth (no government-imposed limits as in China) • 25% of travel is sold online, grows by 30% annually • Social Media is huge and growing but … low internet penetration. Social media will likely be Mobile based 40 © 2009 PhoCusWright Inc. All Rights Reserved.

Brazilian Travel Market The Brazilian Travel Market (US$B) and Online Growth Rates (%), 2008-2012 2008 2,2 0,3 17,2 2009 1,8 0,5 16,4 2010 2,4 0,9 19,5 2011 3,1 1,4 21,9 2012 3,5 2,0 23,6 0 5 10 15 20 25 Supplier Web Site OTA Total Gross Bookings Source: PhoCusWright Inc. PRELIMINARY DATA, SUBJECT TO CHANGE 44 © 2009 PhoCusWright Inc. All Rights Reserved.

Brazilian Online Travel Market OTA vs Supplier Direct Shares (%), 2009 23% OTA Supplier Direct 77% Source: PhoCusWright Inc. PRELIMINARY DATA, SUBJECT TO CHANGE 45 © 2009 PhoCusWright Inc. All Rights Reserved.

Brazilian Online Travel Market Top OTA - 2010 rapi10 Travelocity 2% viajanet 1% 4% malapronta Others 4% 2% Expedia/ Hotels.com 6% submarinoviagens.com. br 40% Priceline/ Booking 6% decolar.com.br 35% Source: PhoCusWright Inc. PRELIMINARY DATA, SUBJECT TO CHANGE 46 © 2009 PhoCusWright Inc. All Rights Reserved.

Social media in Brazil is huge! • (Australia and) Brazil are the top Social Media users in the world. • 85% of Brazilians age 15 and older who accessed the Internet from home or work computers visited a social networking site • Main social media site: Orkut (80% market share) followed by Facebook Brazilians spend an average of 30.2 hours/month online (work+freetime), (worldwide average of 25.7 hours/month), about 8 hours are spent on Orkut • Brazil is the fifth-largest nation of Twitter users and the highest percentage of users of all of the non-English speaking countries. The top Twitter-using countries are all English speaking: the United States leads with 62.1 percent of Twitter users, followed by the UK, Canada, and Australia. Source: Nielsen, comScore 47 © 2009 PhoCusWright Inc. All Rights Reserved.

http://www.marketingfacts.nl	54
http://a0.twimg.com	6
http://twitter.com	3
https://twimg0-a.akamaihd.net	2

Presentation cees bosselaar - phocus wright

by Marketingfacts on Nov 02, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

4 Embeds 65

Statistics

Presentation cees bosselaar - phocus wright — Presentation Transcript