Yet, curiously, eLong, the Chinese subsidiary of global travel giant Expedia - appears to be flailing. Although eLong is the sector’s second-largest online travel agency, it lags far behind leader Ctrip, which has amassed 57 per cent market share, according to iResearch.
According to MD of China Market Research Group Shaun Rein, who has conducted research on China’s travel sector, eLong’s main problem is that it has maintained a relatively low profile and banks on its reliable technology to resonate with Chinese travellers. Ctrip, on the other hand, has marketed aggressively.
Rein points to tactics Ctrip has used to position itself in the forefront of consumers’ minds: planting representatives at taxi stands to help travellers with their luggage; actively advertising on buses and helping people at train stations, even though Ctrip doesn’t book train tickets.
In September, eLong reported a Rmb20.3 million (US$2.9 million) net loss for its second quarter. In contast, rival Ctrip reported a 30 per cent year-on-year gain for its second quarter, and travel search engine Qunar.com showed third-quarter revenues up 400 per cent on Q2. Industry insiders also note eLong has not conducted many high-profile deals recently, aside from a partnership with Google China for hotel searches.
That may change. Rumours are circulating that it is looking to buy stakes in mid-sized traditional travel agencies as part of an alternative strategy, and may significantly boost its marketing budget.
“It has the money and it has the technology - eLong just hasn’t done a good job building up its brand,” Rein says.
“If somebody were smart, they’d buy eLong and rebrand it. But if it doesn’t come up with something, eLong would be very hard pressed to stay in business in the next two or three years.”
Fact box
- In its second-quarter report this year, eLong posted an Rmb 20.3 million (US$2.97 million) net loss. This is down more than Rmb 18 million year on year.
- Although both companies were launched in the same year, 1999, eLong significantly trails Ctrip as the industry’s largest player, with 13.8 per cent share compared to Ctrip’s 57 per cent.
- According to the China National Tourism Administration, in 2007 1.4 billion trips were taken within the borders of China, with more than 40 million being made overseas - an 18.6 per cent increase over the previous year.
Dominic Powers, senior vice-president, Epsilon Asia-Pacific
eLong’s nine years in the market ensure that it has built up a recognisable brand, but a recognisable brand does not necessarily translate into a business success story.
From the outside it appears that eLong suffers at the hands of its global partner and investor Expedia, with pricing and positioning of product offerings that lack the excitement and responsiveness to market events and conditions that the likes of leading regional player Zuji and mainland competitor Ctrip deliver. Ctrip currently boasts more than five times the monthly page views of eLong and therefore one could assume the same for transactions and revenue.
To compete in the online travel sector an offer’s speed to market and price point are the most important in driving yield, and this has never been more true with the likes of Qunar, the travel meta search engine, now well established in the China market.
The good news is, however, that despite the global downturn, there is no sign of slowdown in the burgeoning China travel market, and while eLong today appears to be struggling to compete, with an increased focus on customer retention, and the delivery of timely and relevant offerings, the only way is up.
Tao Li , chief operating officer, HDT World
As a brand eLong has been on a downward slope for the past four or five years and has dropped from the first tier to the second tier in the online travel segment.
eLong has been devoted to competing with Ctrip for a long time, however its distance behind Ctrip is widening and eLong’s brand image among consumers lags Ctrip dramatically. In my opinion, as long as Ctrip does not make fatal mistakes, eLong will become a niche company in the e-tourism agency field.
eLong recently inked a deal with Google on its hotel map-searching engine which lets consumers search hotels freely according to location.
However, this strategic co-operation with Google has limited economic benefit if eLong cannot cooperate with Baidu simultaneously and enhance consumer awareness on a large scale.
The competition is becoming fierce in the e-tourism market. Not only is Ctrip aggressively marketing through different channels, but also some smaller-scale e-tourism agencies are entering the market.
If eLong wants to strengthen and survive, it should establish its own territory by discovering the niches for which it can provide the best services.
Got a view?
Email [email protected]
According to MD of China Market Research Group Shaun Rein, who has conducted research on China’s travel sector, eLong’s main problem is that it has maintained a relatively low profile and banks on its reliable technology to resonate with Chinese travellers. Ctrip, on the other hand, has marketed aggressively.
Rein points to tactics Ctrip has used to position itself in the forefront of consumers’ minds: planting representatives at taxi stands to help travellers with their luggage; actively advertising on buses and helping people at train stations, even though Ctrip doesn’t book train tickets.
In September, eLong reported a Rmb20.3 million (US$2.9 million) net loss for its second quarter. In contast, rival Ctrip reported a 30 per cent year-on-year gain for its second quarter, and travel search engine Qunar.com showed third-quarter revenues up 400 per cent on Q2. Industry insiders also note eLong has not conducted many high-profile deals recently, aside from a partnership with Google China for hotel searches.
That may change. Rumours are circulating that it is looking to buy stakes in mid-sized traditional travel agencies as part of an alternative strategy, and may significantly boost its marketing budget.
“It has the money and it has the technology - eLong just hasn’t done a good job building up its brand,” Rein says.
“If somebody were smart, they’d buy eLong and rebrand it. But if it doesn’t come up with something, eLong would be very hard pressed to stay in business in the next two or three years.”
Fact box
- In its second-quarter report this year, eLong posted an Rmb 20.3 million (US$2.97 million) net loss. This is down more than Rmb 18 million year on year.
- Although both companies were launched in the same year, 1999, eLong significantly trails Ctrip as the industry’s largest player, with 13.8 per cent share compared to Ctrip’s 57 per cent.
- According to the China National Tourism Administration, in 2007 1.4 billion trips were taken within the borders of China, with more than 40 million being made overseas - an 18.6 per cent increase over the previous year.
Dominic Powers, senior vice-president, Epsilon Asia-Pacific
eLong’s nine years in the market ensure that it has built up a recognisable brand, but a recognisable brand does not necessarily translate into a business success story.
From the outside it appears that eLong suffers at the hands of its global partner and investor Expedia, with pricing and positioning of product offerings that lack the excitement and responsiveness to market events and conditions that the likes of leading regional player Zuji and mainland competitor Ctrip deliver. Ctrip currently boasts more than five times the monthly page views of eLong and therefore one could assume the same for transactions and revenue.
To compete in the online travel sector an offer’s speed to market and price point are the most important in driving yield, and this has never been more true with the likes of Qunar, the travel meta search engine, now well established in the China market.
The good news is, however, that despite the global downturn, there is no sign of slowdown in the burgeoning China travel market, and while eLong today appears to be struggling to compete, with an increased focus on customer retention, and the delivery of timely and relevant offerings, the only way is up.
Tao Li , chief operating officer, HDT World
As a brand eLong has been on a downward slope for the past four or five years and has dropped from the first tier to the second tier in the online travel segment.
eLong has been devoted to competing with Ctrip for a long time, however its distance behind Ctrip is widening and eLong’s brand image among consumers lags Ctrip dramatically. In my opinion, as long as Ctrip does not make fatal mistakes, eLong will become a niche company in the e-tourism agency field.
eLong recently inked a deal with Google on its hotel map-searching engine which lets consumers search hotels freely according to location.
However, this strategic co-operation with Google has limited economic benefit if eLong cannot cooperate with Baidu simultaneously and enhance consumer awareness on a large scale.
The competition is becoming fierce in the e-tourism market. Not only is Ctrip aggressively marketing through different channels, but also some smaller-scale e-tourism agencies are entering the market.
If eLong wants to strengthen and survive, it should establish its own territory by discovering the niches for which it can provide the best services.
Got a view?
Email [email protected]
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