While China’s mobile-propelled spending power has been a hot topic of late, the consensus is that transforming its successful outbound businesses into integrated regional travel powers will first require hard work and patience – especially to bridge the critical people-gap.
For the panel addressing ‘China Power, Local Stories, Global Ambitions’ at WiT Singapore 2018, one thing was clear though – spending power can make a perfect base ingredient for the pursuit of global fun.
“Customers need a fun experience around the world,” noted Frank Huang, vice president and general manager of hotel business, Fliggy. Formerly Alitrip, Fliggy acts as an online mall for brands, and is part of China’s ever-increasing Alibaba payment ecosystem.
As China’s society modernises and gains further sophistication, its internet companies have kept pace with local demand, helping in turn to develop new and unique ways of making the pursuit of travel fun, even easier. With the help of local partnerships, more regional players now have the chance to tap into China’s impatient, fun-seeking outbound market.
“From Alibaba’s point of view, partners want to use the technology,” said Huang. Under its model, the key is to train local partners in the platform structure, enabling them to in time apply local market knowledge to tap into local market opportunities.
He noted that the key was to hand the pipe to the right local expertise. “It’s not about doing the business by ourselves: we want to sell the platform model to all the partners around the world.” Local partners as such are invited to participate in the ecosystem, and can in turn face and interact with the customers themselves.
For Victor Tseng, vice president, corporate affairs, Ctrip, the secret to expansion lies in being equally pragmatic and culturally aware. As he noted, the company’s global expansion is anchored to leveraging the Chinese outbound travel trade’s momentum. “It gives us confidence that in servicing these Chinese, we can in turn localise the team,” he says. “For Ctrip, there’s a clear path to what we should be doing internationally.”
“Leveraging Chinese outbound gives us the ability to source locally and have a very competitive supply chain.” Having invested widely, the result has been a broad footprint across the world. With more than 80 million active monthly users, and stakes in regional players, Ctrip’s own OTA, Trip.com is now online in 14 different languages – all of which helps deliver further supply chain power.
While utilising the Ctrip brand, local teams also set out to develop effective local partnerships to create relevant local interfaces, he noted. “These teams are focused on developing local payment possibilities.”
As with any Asia expansion, Ctrip was mindful that a strict modular approach to culturally and economically diverse markets would fall short. “The local element is very important. It’s a step by step process, but it’s something we’re very keen to commit to,” said Tseng. A local Korean call centre had recently been launched, he said, in recognition of local market preferences for the personal touch.
Ask whether the biggest challenge in global expansion was people, Tseng agreed that going regional is a cultural challenge. “Language barriers are certainly an issue in hiring talent,” he said. “Each and every market has different rules and regulations, so it’s not a cookie-cutter approach. It takes commitment.”
Changle Yang, chief operating officer, Tujia, one of China’s leading homestay booking platforms, acknowledged that doing business in foreign countries has its challenges. “Among all the problems, the most difficult is, how you can offer high quality services just like your domestic services?”
With Tujia only having embarked on its global expansion path relatively recently, Yang said the process was about going back to basics in terms of operations, providing a consistent experience, and being inclusive enough for a growingly diverse regional team. Then, once the internal challenge is addressed, customer research provides the next challenge. “The brand building bit is important, he noted. “The Chinese company has to work twice as hard in the international market.”
Achieving product consistency could often provide the hardest challenge, said Yang. “Among all the problems, the most difficult is, how you can offer high quality services just like your domestic services?”
Cinn Tann, chief sales and marketing officer, Pan Pacific Hotels Group, agreed meanwhile that cultural differences remain one of the key challenges for Chinese companies venturing overseas. “The Chinese companies do have an easier task in servicing the outbound market,” she said. For Pan Pacific, the chief focus would continue to be driven more around bringing global fun to the mainland, by presenting relevant international brands to its array of Chinese customers.
