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Taken at face value, statistics about online travel growth in Asia depict a territory still working towards parity with the U.S. and Europe. However, in reality, the vast majority of travel transactions in the region are still made offline, whether through a traditional agent or ‘online-to-offline’—researching online, then booking in person or over the phone.
But focus too closely on the travel sector and you can miss the bigger picture: a region where technology is often ahead of the West in both ecommerce and communications, where businesses are honing new ways of capitalizing on mobile experiences, payment technologies and data that other territories have yet to explore.
We spoke to industry figures with a perspective on both Asia and the West to get their perspective on the tech advances you should be tracking.
Mobile for everything
Bearing in mind that the region includes Taiwan, Japan, Singapore and Hong Kong, four of the five most penetrated markets in the world, the picture across Asia varies widely. The continent’s average mobile penetration doubled between 2012 and 2017, reaching just under half the population by the end of 2016, according to a study from the GSMA.
Nor is it just penetration that is more advanced than ever before. Infrastructure and browsing speeds often are too. Kei Shibata, chief executive officer and co-founder of Tokyo-based Venture Republic—the company behind Travel.jp and Hotels.jp—singles out South Korea, where the company has a significant investment in the mobile-focused hotel metasearch Allstay. “South Korea is amazing,” he says. “Their infrastructure is the best in the world. 3G and 4G penetration, speed, coverage—everything is top-notch. During the peak travel season we see traffic from mobile devices jump up to above 80 percent.”
Over in China, mobile first overtook desktop back in 2012, and by 2016 some 95.1 percent of internet users were accessing the internet on mobile, according to the China Internet Network Information Center (CNNIC). The US lags behind even in projected figures—it is expected to hit 86.5 percent in 2021.
For Sherri Wu, a former Alibaba and Alitrip executive who is now chief strategy officer at China-focused e-commerce tech provider VoyageOne, China’s leapfrog behavior has led to a far greater focus on mobile experience and performance. “I think in the U.S. we’ll say, ‘Hey, we’re going to do mobile first’—but that’s just because we’re trying to emphasize mobile. Still things are developed in desktop. In China all these large companies actually develop mobile first, then think about desktop.”
Aileen McCormack, Chief Commercial Officer at European multimodal travel technology firm CarTrawler believes that Western countries have to step up if they want to remain competitive in this space. “The West has found itself in the back seat in terms of mobile first technology,” she said. “Conversational commerce is the term reverberating off the walls in boardrooms throughout the world and the gaze has fallen firmly on China and the monumental success of WeChat.”
‘One to ten thousand’: Super-powering chat
As a WhatsApp or Facebook Messenger user in the West, it’s hard to grasp how all-encompassing chat has become in some Asian markets. China’s WeChat offers the most prominent example—calling it a “super-app” would be no exaggeration. As of late 2017 WeChat has 938 million monthly active users, and owns about 30 percent of all mobile app time in the China market, totaling some 900 million hours of use per day.
Naturally, it’s a space that brands are keen to play in. Branded accounts have been available since 2012, and in early 2017 WeChat debuted ‘mini-programmes’. These stripped-back apps live within the WeChat ecosystem, allowing brands to push beyond basic branded accounts and bots without developing a standalone app.
Ctrip and Qunar already have mini-programmes, and have been active on WeChat for some time, with Qunar seeing some early success from targeted WeChat-only promotions. But Sherri Wu stresses that promotion is only one part of the picture.
“It’s a great communication [tool]. For instance if I book a trip using Ctrip’s app, they’ll give me a reminder and also ask me what else they can help me with. That’s something we don’t see very often in the US. In Asia this has become a great way to engage your customer and cross-sell. I land in Tokyo and [get notifications] telling me, ‘Hey, there are great restaurants around, shopping, discounts’.”
Over in Japan and South Korea, chat apps aren’t quite as all-encompassing. “Japan is different [from China],” says Kei Shibata. “The largest chat app is Line, and in South Korea it’s KakaoTalk. WeChat is more comprehensive. I would position Line and Kakao as somewhere in between WhatsApp and WeChat.”
For Shibata’s own business, Line’s power comes from news aggregation. This is a competitive space in Japan, with Line News up against ambitious entrants such as SmartNews, NewsPicks, Gunosy and Antenna.
“We’re an official content provider on Line,” says Shibata. “We distribute travel articles every day. We syndicate a network of travel bloggers and influencers, and Line is one of our biggest distribution channels.”
It becomes a way of addressing a perennial issue for travel brands: their inability to connect with users on a consistent, day-to-day basis. “That’s the beauty of the model,” says Shibata. “Expedia, Booking.com, they wish they could communicate with users every day. We’ve been able to succeed in this almost because of mobile initiatives [such as Line News].”
Big, bigger, biggest: How BAT are harnessing traveler data
China’s big three—Baidu, Alibaba and Tencent, or BAT—have vast stores of data, with Alibaba alone pulling information from 423 million active buyers.
Their data isn’t just deep. It’s wide too, as Alibaba’s customer records span multiple purchase categories and service sectors, from travel to retail to finance. It is now bidding to bring around 1 million small independent shops into its data network via the Alibaba Distribution Platform (ADP), a retail management system. “In travel, that’s Alitrip’s advantage versus everyone else,” says Sherri Wu.
“They have the majority of the consumer data. Alibaba is a closed ecosystem in that sense. In the Alitrip platform, on the surface it has been changed, because the way you talk to a GDS, the way you book a hotel is different to how you sell a piece of clothing. But underlying that, the whole Alibaba system is one system.” Wu says.
The idea is to mine that in-house data to identify travel intent—something that vertical businesses can only do by buying in browsing and search insights. She explains: “For instance you have a person who has bought luggage, bought a backpack, bought hiking shoes. You say ‘Hey, I think the person might be looking for a trip’. Then we try to not just personalize the page, but also send them a text message through the Alibaba system.”
Even with those advantages, personalization is just a small part of the picture. China’s giants have bigger ambitions for data, and are using it to drive whole new services and large-scale operational efficiencies. Ant Financial, Alibaba’s finance affiliate, has developed an AI system that can assess insurance claims based on automated analysis of a photo. And its Sesame Credit tool uses consumers’ data to assess their creditworthiness, allowing those with a superior score to access products and services—including hotel bookings—without a deposit.
AI is also being deployed in customer services, helping brands to deal with high-volume enquiries from a famously demanding market. Even complex industries such as finance are using bots on popular chat platforms—China Merchant Bank’s WeChat bot handles 1.5 to 2 million customer conversations per day, and Ant Financial’s has surpassed human agents in terms of customer satisfaction.
A glimpse of the near future
Mobile, chat and big data are familiar enough, but Asia’s mobile-dominated, fast-growing markets offer a glimpse of what they look like with the brakes taken off: mobile devices become “remote controls” for the world; chat becomes a near-universal interface; new payment methods revolutionize shopping habits and enable new digital marketplaces; and vast, varied stores of data help businesses spot new opportunities and develop new products. How the region’s travel markets mature against this landscape looks likely to be one of the most surprising and illuminating stories of the next decade.
This content was created by Cartrawler and published by Skift’s branded content studio SkiftX.