Tnooz: why the Baidu / Qunar deal is a moment in Chinese economic history

New post now live on Tnooz titled "Unhappy Fourth of July – Why summer 2011 is a big moment in Chinese online travel". In it I analyse the $306mm investment by Chinese search giant Baidu in Chinese meta-search giant Qunar. Check out the full story and analysis here.

Shanghai skyline 1990 vs 2010

China has often been a topic here on the BOOT. Nothing sums up the growth and change in China like this photo comparing the Shanghai skyline of 1990 with last year (2010).

Hat tips it io9 and @nils_gilman

Qunar mulling IPO in second half 2011

Quick one - check out the news report from the 26th from the Nasdaq news pages, Qunar CEO Fritz Demopoulos is contemplating an IPO for the 5 year old Chinese meta-search company. According to Crunchbase they have raised $25mm to date. News story is here

Thanks to Brett Henry for alerting me to this.

Business Traveller Tip: Seven Tips for Travelling in China

Have just returned from a 13 day business trip covering greater China (China itself, Hong Kong and Taiwan). For the latest in my series of business traveller tips I present to you “seven tips for business travelling in China”:

1. Present your business card properly: The western way to hand over a card is with the card in the left hand and shake with the right. The polite Chinese way to hand over a card is with the card presented name forward held by the thumb and forefinger of both the right and left hands. By holding the card in two hands you present the card in a courteous way and give the receiver a clear chance to review and confirm your name and title. You should similarly receive presented cards by accepting the card with two hands;
2. Don’t discount the local 5 star properties: China is full of western five star hotels from Starwood, Accor, IHG etc. The temptation when on the company dollar is to stay at one of these safe (and beautiful) properties. However there are also some excellent local 5 star properties and chains. On this trip I stayed at the Taipei Park hotel in Tapei and the Taiwanese owned Les Suites Orient in Shanghai. Both fantastic properties. I also visited scores of local properties and came a cross a number of gems. Research the local 5s before picking a place to stay;
   
3. Lean a few words of Mandarin. Get an app or download a podcast (try the one minute Mandarin series) and learn a few phrases like hello, thank you and my name is… Easy to do and easy to impress with;
   
4. Leave room in your bag for shopping. The shopping is incredible – especially the range and price for toys for children and the cost of tailored shirts. Keep some space in your bag because you will be tempted to buy something. If a regular traveller then forge a relationship with a tailor (I recommend Jantzen. If you go there tell them I sent you);
5. If you leave the hotel, get “the card”: The concierge will have a card with the name of the hotel and directions designed for taxi drivers. Take it with you whenever you leave the hotel;
6. You will need a VPN to be social: General Chinese mainland internet connectivity blocks Twitter, Facebook, Blogger and other social networking and UGC sites. Not all the time but most of the time. Connecting to the Internet through your corporate VPN will probably get you around the Great Wall filter and allow you to be as online social as you like; and
   
7. Be adventurous with food: The Chinese food of China is different to the Chinese food of western Chinese restaurants. There is a greater range of food and regional variation. Be adventurous. Try different things – you will be surprised. This trip I tried and enjoyed baked fish head (two regional versions), chilled jelly fish, glutinous rice stuffed dates, fried oyster omelette, sweet cabbage soup and braised sea cucumber (think long jelly fish). As well as enjoying the less adventurous but delicious roast duck (three different regional variations) and stir fired eggplant (again three variations). I enjoyed all of it except the sea cucumber. But am glad I tried it (see the photo above of me eating). If you are interested in how much Chinese food has changed in getting to the West check out the site the Fortune Cookie Chronicles

Do you have any other tips for making the most out of of a biz trip to China?

Recommended Read: Role of social networking in Chinese online travel market

I am on a business trip to China so have been reading up on research on general and online specific travel trends. There is a lot of information out on the Intertubes but much of it is buried deep on disparate sites- and is often contradictory. Thanks to a tweet from Chloe Lim I came across and economist article collecting a selection of the better research links. The story is an Economnist piece called “Travelling with a little help from friends “. It is the BOOT recommended read of the week.

Summary from the story is that more than any other market, the online China is turning to social networking to drive retail purchasing behaviour including travel.

It quotes from:

• Travelport’s China Online Travel Survey;
• Nielsen and PATA’s China Outbound Travel Monitor 2009 (pdf);
• PhoCusWrights “The Emerging Online Travel Marketplace in China” (ehotelier extract here); and
• CNNIC stats collected on BizReport.

Full Economist story here.

If you want to round out the China story with some inbound information, thanks to Roy Graff for pointing me to the CNTO’s page with inbound travel statistics.

More on China from McKinsey Quarterly

I think I might as well call it China month here are the BOOT. I have another interesting piece for you to read about the Online market in China. This one is from McKinsey and covers online China in general (not just travel). Called "China's Internet Obsession" this article comes from the McKinsey Quarterly (registration required for full article but no cost to register). Couple of highlights from the article:

• China is world's largest internet market in terms of people - 384mm online. 50% increase since 2008;
• One in five consumers between the ages of 18 and 44 won’t purchase a product or service without first researching it on the Internet; and
  
• Online advertising has been growing at between 20 and 30 percent a year—twice the print media’s growth rate—and the market was around $3 billion (20 billion renminbi) in size last year.

thanks to Chi King via flickr for the photo

Motley Fool on eLong, Ctrip, Home Inn and more in China

It is definitely China week here are the BOOT. Two posts on Ctrip last week one on an interview with their CFO Jane Jie Sun and one on their acquisition war chest plans.

This week I came across another interesting post for China watches to read. Rick Munarriz over at the Motley Fool site published a post titled "Panoramic View of Chinese Travel Plays" In the story Muarriz discusses the performance of online travel company eLong (Nasdaq: LONG) , budget hotel chain Home Inn (Nasdaq: HMIN) (interesting side bar - Home Inn was founded by CTRIP founder) as well as Ctrip (Nasdaq: CTRP) itself and even Priceline (Nasdaq: PCLN) and AirMedia (Nasdaq: AMCN).

Good comparison on performance of eLong and Ctrip. Worth a read. Interesting note on eLong. Though it is profitable, more than half its market cap is explained by the $139mm in cash in the bank.

thanks to steve webel for the great photo care of flickr

Ctrip makes very strong hints that looking for acquisitions

Day for a Ctrip double post. A few movements ago a link to a Tom Botts post from a presentation by Ctrip CFO Jane Jie Sun. Now I have just spotted a Reuters/Yahoo! Finance news story that Ctrip are planning to place 5.7mm American Depositary Shares (currently priced at around $36). In non-finance English this means they are looking to raise somewhere around $200mm in capital. What do they plan to do with it? The Reuters story says they plan to use the money to buy or invest in "complementary businesses and assets" and for general corporate purposes. In non-finance English "complementary businesses and assets"means buying some one. Ctrip plus $200mm equals consolidation. Speculation time....who do you think they are most likely to buy?

Ctrip CFO Jane Jie Sun presentation notes

BOOT recommended read of the week - Tom Botts of Hudson Crossing's summary of Ctrip CFO Jane Jie Sun presentation at the Goldman Sachs Technology and Internet Conference in San Francisco. Post is called "Ctrip and Home Inn: How Different China Really is". Includes notes like "Only 2% of travel in China is booked online today - and Ctrip has 50% of that market". Worth a read. Always worth remembering that online travel in China has a different meaning that elsewhere.

Kuxun acquisition takes TripAdvisor further into China

Expedia's TripAdvisor is to buy Chinese meta-search company Kuxun (at least I think it is a meta-search company) (according to Dow Jones via Hotelmarketing.com). TripAdvior CEO Steve Kaufer would not give away how much was paid but is quoted in the article as saying he has US$50mm to invest in China in 2010 and 2011 but this includes setting up the local version of TripAdvisor Daodao.com. Also said he plans to double the number of staff in China from 80 to 160. My guess (no basis just a hunch) is Kuxun will be used as the tech behind Daodao with Kuxun's brand to disappear soon after the deal.

In case you are wondering about meanings. I am reliably informed that Kuxun means Cool Information or Smart Information and Daodao means To Reach, To Arrive.

Her is my updated list of TripAdvisor Acquisitions in the last few years:

• Kuxun;
  
• Flipkey
  
• Airfarewatchdog.com
• OneTime.com
• Virtual Tourist
• HolidayWatchdog
  
• smartertravel.com
• bookingbuddy.com;
• TravelPod.com;
• Travel-Library.com;
• SeatGuru.com; and
• Cruisecritic.com.

I always close these stories with the reminder that Expedia owns TripAdvisor as you'd be surprised how much search traffic I get asking the question "who owns TripAdvisor"

Ctrip and Qunar go to war over $150

Just last week I was sharing my thoughts with you about the China market - specifically that while it Ctrip that dominates travel sales in China it is arguable that Qunar is the biggest travel site if you measure by online traffic and share of voice.

In a (clearly) unrelated move, news out today that Ctrip is suing Qunar. In a story that looks like the recent battles between RyanAir and the meta-search players, the fight is over Ctrip's allegation that Qunar is screen scraping Ctrip and that such a thing is illegal.

The compensation being sort - a paltry RMB 1,000 ($146) according to the media reports.

Very few details out their in Web land about this legal action. My guess is (with no knowledge of the Chinese legal market) is that RMB 1,000 is the nominal damages amount in Chinese courts. Really what Ctrip is looking for is an injunction to stop Qunar from scraping to either force Qunar pay for access or to hurt the Qunar business and shut down a competitor.

Thanks to Martin from Wego who was first to send me the story (Siew Hoon at Transit Cafe was just seconds behind Martin)

WebInTravel: Ctrip has more than 50% of the Chinese online travel market. But is Qunar the bigger online business?

At the WebInTravel conference last week Siew Hoon hosted a panel with ctrip Director of Biz Dev Alfred Chang and meta-search company Qunar's CEO Fritz Demopoulos.

Chang of ctrip dropped some very impressive numbers into his presentation including:

• 8,000 employees (4,000 in call centres)
• 28,000 hotels in 134 countries
• 6,000 hotels direct contracted (90% of volume)
• 1mm room nights monthly, 1mm air reservations monthly, 30,000 passenger trips in packages monthly; and
  
• (most impressively) 54% market share of online in China (see pie chart below copied from his slide

But (and this is a comment I have made before), online in the China market does not have the same definition as we would use elsewhere. Online should mean "no touch". Where the transaction is completed without the interaction between the customer and the intermediary at a people level. In the case of ctrip - 80% of there transactions are conducted purely through the call centre. This is not even web referred (ie search online but complete by phone). This pure offline call centre stuff - where the consumer dials ctrip and completes the whole transaction via the phone. There is nothing wrong with this, ctrip is a highly profitable and growing company. It is just important to know what it means to be online in China.

Next to ctrip's Chang was Fritz Demopoulos of Qunar. They are Chinese largest travel meta-search and content company- claiming more than 20 million montly users. The qustion I posed and we dont have a clear answer for is "if Qunar is 100% online and ctrip is only 20% online, then doesn't that make Qunar the largest online travel player in China?". We don't have an answer because clearly ctrip is a bigger company and Qunar is in the less mature business of online media. But it again highlights the interesting nature of the online/offline travel market in China. The bigger website (Qunar) is the smaller business.

Bejing Olympics: Translate Server Error restaurant

If you have not seen it yet pop over to Adfreak.com to see the shot of the Beijing restaurant that clearly relied on a website to translate the cafe's name from simplified Chinese into English. The result - the cafe is now called "Translate server error".

Olympics. Good for China Tourism or bad. Here are two views

Will the Olympics be the "Authoritarian Games" or a chance for "Hotels [to] enjoy a roaring trade". Roy Graff has both side of the argument over at his China travel industry blog.

thanks to Nod Young on flickr for the I love Beijing image

New York Times: Interview with Ctrip CFO Jane Jie Sun

Just spotted over at the New Times website - an interview with Ctrip CFO Jane Jie Sun. Another indication of Ctrip's strong desire to expand their customer base outside of China. Claims 50% of the online market and tha tthe online market is 1-2% of the overall travel market. In addition they have another 2-3 % of the overall travel market through call centres. Claim total Chinese travel market is $150billion (Chinese domestic plus foreign inbound). That would put the online travel market at $1.5-3 billion confirming other numbers we have seen.