Despite the adverse impacts of the pandemic, China’s Trip.com (earlier known as Ctrip) claims to have witnessed significant growth this year.
The company saw its revenues from corporate travel jump 141% to 390 million yuan ($61 million) in the June quarter this year from the same period in 2020, and a 55% increase compared to the previous quarter.
Trip.com co-founder and executive chairman James Liang attributed the growth to the revival in domestic tourism and the company’s increased focus on livestream e-commerce that the company launched during the peak of the pandemic in March 2020.
“As the international travel industry suffers in the middle of the pandemic, we at Trip.com Group decided to bet big on domestic tourism with a target to spruce up four segments – content marketing, travel product, supply chain, quality,” Liang told DealStreetAsia in an interview.
The COVID-19 crisis has altered consumer habits drastically – both in areas of travel and online spending. To keep pace with that, the company decided to launch livestream e-commerce last year in a bid to enable online travel aggregators to sell value offers to customers from the comfort of their homes.
“During our debut live show last year in March, we generated gross merchandise volume (GMV) of over 10 million yuan ($1.6 million). And as of October this year, we have finished more than 80 BOSS Live Shows,” Liang added.
Edited excerpts of an interview with Liang:
You started live-commerce last year during the peak of the pandemic and it has witnessed significant growth ever since. Can you take us through your strategy and decision to foray into the space?
China’s shift from offline to online shopping became rather evident during the COVID-19 crisis in 2020. And, since we, at Trip.com, were already aware of the digitalization process, we decided to launch the livestream pre-sales channel – that included BOSS Live Show – in an attempt to ramp up our digital content marketing.
How has the strategy benefited you?
We have taken good advantage of partnerships with industry players such as hotels and airlines, providing them a full-stop solution to boost their online sales aiding their recovery. We have also been able to offer cost-effective products and travel experiences to consumers – which have helped us attract a large number of travelers across the country.
In 2020, our transactions through our live shows and special offer networks clocked about 5 billion yuan ($783 million). During the same period, a total of 200 million consumers tuned in for our live programmes.
And, this year, the sales earnings on live streaming have seen an exponential increase. For instance, earlier in June, our volume of business on live-streaming recorded a 149% year-on-year growth.
Take us through your target audience.
Statistics from our report last year in July showed that the spending came primarily from the post-80’s generation which contributed over half of the GMV. The remaining 20% came in from the post-90’s generation. Regarding the male-to-female ratio, the latter accounted for 60% of the spending, and men users, 40%.
In terms of spending, female consumers cared more about destinations that could offer activities where both parents and children could participate. However, the male group prioritized food and beverage.
What measures are you taking to attract new-age consumers?
First of all, we organize theme-driven live shows that satisfy the curiosity of young consumers. Secondly, for live shows, we provide qualitative, yet good bargains. Thirdly, we are building an extensive portfolio of packages – from hotel to holiday, flight ticket, dining, drinking, destination tour, cruise trip, among others.
You mentioned the BOSS Live Show. In many ways, that’s become a recovery engine for China’s tourism industry. Your comments.
We’ve forged long-term partnerships with global hotel management groups, property developers, tourist bureaus, and local authorities – including Hilton, Accor, InterContinental, Shimao Group Holdings, among others. We invited representatives to join the BOSS Live Show to promote travel products and destinations.
Not only did the show help us revive consumer interest in domestic destinations, but it has also helped us collaborate with government administrations and enterprises in the tourism industry.
Take East China’s Jiangsu province for instance. Last year, in April, I traveled to the destination hosting a show with theatrical performances and interaction with key opinion leaders and it generated 4.50 million of GMV. By the end of July this year, we could bring over 33 million tourists to Jiangsu.
What are the other destinations on the radar?
Since the outbreak of the pandemic, we have also been trying to revive tourism in the province of Hainan, which is one of China’s free trade ports located in the southernmost part. In 2020, we inked an agreement with Hainan Provincial Department of Culture and Tourism aimed at driving the tourism business together.
We at Trip.com Group have also joined hands with the Sanya Tourism Promotion Board and Sanya Phoenix International Airport – we organized a shopping festival, and a spring festival in Sanya, respectively.
Tell us about your strategy to pivot into different areas.
As the international travel industry suffers in the middle of the pandemic, we at Trip.com Group, decided to bet big on domestic tourism with a target to spruce up four segments – content marketing, travel product, supply chain, quality.
Apart from live-streaming programmes, we created a new travel marketing hub, the Star Hub channel, which is live on the brand’s mobile application. Till June this year, the total purchase made through Star Hub increased by 75% compared to May, and the fan size also jumped 36%.
What is your take on international travel in the current situation? What has Trip.com done to revive it?
Before the pandemic, our business from international travel scaled up year after year. The turnover in 2017 accounted for 20% of the group’s annual revenue, while it increased to about 35-40% in 2019.
During the pandemic, we’ve made efforts to revive the overseas markets through innovative marketing strategies.
Among other initiatives, we have forged an agreement – a five-year MOU – with Argentina Ministry of Tourism & Sports. We are also looking at expanding our network in several parts of Europe such as Italy, Austria, and the UK.
With everyone getting vaccinated, and borders reopening, we believe overseas travel will revive.
China has rolled out a three-children policy. How will that influence the tourism industry?
Earlier this year, we rolled out a report disclosing that China’s family spending on children’s travels and leisures in the first half of the year was up 41% compared to the previous year. We can see the implementation of the policy is positive for the parent-child travel market, which will add room for development and encourage industry players to roll out innovative products like concerts and camping.