China’s Qunar looks to mobile to hone strategic edge
By Doug Tsuruoka, Investor’s Business Daily
Baidu-backed Chinese online travel agency Qunar sees mobile travel bookings as a crucial part of its strategy to keep grabbing market share and remain China’s most-visited online travel website.
Qunar — the name means “Where are you going?” in Chinese — is 61% owned by Baidu (BIDU), China’s No. 1 search engine.
Jenna Qian, deputy general manager of Beijing-based Qunar Cayman Islands (QUNR), told IBD that Qunar, which raised $167 million in a Nasdaq IPO on Nov. 1, wants to provide China’s most comprehensive product so consumers can do both search and bookings “at their fingertips.” Qian says that, as in the U.S., China’s travel bookings are migrating from PCs to mobile devices.
That, she says, will help Qunar grow in one of the emerging opportunities for online travel in China: providing taxi services via mobile phone. Qunar has been making arrangements with all taxi services in China so mobile users can book a taxi, she says.
China reportedly has 1.1 million taxis on the road.
Qunar stock soared 89% its first day of trading, to 28.40. Shares priced at $15, above the company’s expected range of $12 to $14. It now trades near 25.50.
The successful IPO signaled that U.S. investors are again warming to Chinese stocks after an accounting scandal two years ago undercut the credibility of some U.S.-listed Chinese companies.
“The whole global IPO market is generating lots of excitement, and Qunar has good pedigree from Baidu,” said Henry S. Tang, a managing partner in New York-based Carnegie Towers strategic investment advisory group. “The question is whether this will ripple out to Chinese companies of lesser provenance. If it does, punters will be in the driver’s seat.”
Qunar says its mobile app has been downloaded more than 100 million times in China, twice that of main rival Ctrip.com International (CTRP).
“Mobile is going to be the strongest growth segment in the Chinese travel space, and we’ve been the leader in mobile for some time,” Qian said.
Qunar is aggressive with its mobile strategy, says Maggie Rauch, an analyst for online travel tracker PhoCusWright.
“They are really going for a tight association in the traveler’s mind between mobile travel search and Qunar,” Rauch said.
No. 1 Since 2009
Qunar became China’s No. 1 travel website based on traffic in December 2009, according to tracker Experian Hitwise. It attracted more than 200 million users from June 2012 to June 2013, about 20% via mobile devices. In Q4, it passed Ctrip to become the No. 1 seller of online plane tickets in China.
PHOTO: Qunar, Ctrip and others are growing as more Chinese travel. Ctrip’s booth attracts a crowd at an August tourism trade show in Guangzhou. Liao… View Qunar, she says, has developed a “strong, fast platform.”
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