As we ramp up for the 14th edition of WebInTravel in Singapore, a few key trends are crystallising that signal the next wave of digital travel in Asia.
These will require different thinking and tactics on the part of foreign brands that wish to be part of the “next billion users” market.
In China recently, attending the 12th TravelDaily Conference & Digital Travel Show (CDTS), I was reminded of what Glenn Fogel, CEO of Booking Holdings, had said on this same stage some years ago – that he didn’t consider to have won in China until it had a substantial share of the domestic market.
Well, Booking.com is on its way to doing that. For starters, it’s made China a standalone business unit and it’s appointed Marsha Ma to run the business.
There are unique things happening within the region that cannot be tackled with templates from Europe or the U.S. So what worked the last ten years will not work for the next decade.
Siew Hoon Yeoh
It is understood her role covers the entire business, not just supplier relationships, but product and marketing as well, the first time such empowerment has been given.
Ma’s credentials are impressive. She used to work in Silicon Valley and, prior to Booking.com, worked at Tencent, Alibaba and Microsoft.
During the conference, she says she joined Booking.com because, as a consumer, she loved the brand. Since she joined, she’s been building up brand awareness and one initiative includes signing a strategic partnership with Spring Airlines, under which both parties integrate their platform resources as well as have a co-branded aircraft.
Ma says this has been a highly successful brand activation, with plans to partner with other airlines.
Meanwhile, in the Singapore office, a new chief arrived a month ago – Angel Llull Mancas, the new vice president and managing director for APAC, started off as country manager based in Barcelona in 2012 and then took on Europe (minus Italy) before moving to San Francisco five years ago to take on the Americas.
He’s clearly deemed the right person to take on new market growth for the Amsterdam-based giant.
Like Ma, Llull will be responsible for the entire business, which means product, marketing and supplier partnerships.
What it all means
The two moves are part of a wave of deeper localisation by foreign brands which recognise that to dig deeper into Asia, they need local empowerment to create localised products, find new customer acquisition channels and build local brand awareness in a manner that resonates with consumers in Asia.
In a word, decentralisation – which can be a scary term to tech companies which generally believe that scale can only be achieved with centralisation.
But in a market as fragmented as Asia, with customers evolving at different stages, and things happening in the region faster than you can say “swipe”, decentralization is the only way to achieve deeper and more meaningful localization.
Expedia Group chose local partnerships as a route to market but it was only in the last couple of years that it recognised product innovation and customer acquisition had to be localized, and based an Innovation Lab in Singapore as well as build local product teams.
Because, the truth is, Asia is blazing its own way forward in terms of how the online travel market has evolved, and is evolving.
There are unique things happening within the region that cannot be tackled with templates from Europe or the U.S. So what worked the last ten years will not work for the next decade.
At the China conference, it was interesting to listen to household brands in Europe on how they are addressing China differently.
Thomas Cook, which entered the market in 2016, took two decisions that have helped it greatly, says managing director Alessandro Dossi. It built a tech team in China which allowed it to scale faster, and it decided to distribute through Taobao, which has become its biggest sales channel.
Club Mediterranee is developing mobile products in China which are then being adapted to other markets. Because Chinese consumers are so open to change, managing director Gino Andreetta believes it was a good market to test products and then roll them out in other markets which are behind in terms of mobile provision.
Asia's tech prowess
Around the rest of Asia, there are two elements that are being watched with great interest by foreign brands – the rise of messaging as a distribution and ecommerce ecosystem and payments.
Japan’s messaging giant LINE’s entry into travel by acquiring 34% of the country’s leading travel search has created LINE TRAVEL JP, a new hybrid model which brings meta and messaging together to put travel products in the hands of 75 million monthly users of LINE in the country.
Travel is part of LINE Commerce Gateway strategy in which the messaging giant wants to roll out other ecommerce services on its platform.
Then, of course, there’s WeChat, which is a world unto its own and needs dedicated teams to fully harness its ecosystem, of which its most powerful play is in payments.
The disruption being seen in fintech is unbelievable. With its cross-border payment challenges, this has been the toughest nut to crack in Asia for travel brands who want to operate across the region.
Banks are quaking in fear at the thought of the coming disruption.
Speaking at a recent travel event, Bidyut Dumra, head of innovation at DBS Bank, Singapore’s leading bank, spoke of the disruption happening.
In the past year, there’s been 12,000 fintech companies started up, soaking up $65 billion in equity. “Even if only one percent makes it, that’s 120 new competitors,” he says. “The pace of change is rapid and everyone’s getting into banks, including Grab and AirAsia.”
Fintech startups are mushrooming across Asia – from the Philippines to Thailand and Indonesia – and they will be the next wave of disruption in ecommerce and travel companies are watching this wave with great interest – some will even admit they were slow to wake up to this, as some were slow to wake up to mobile in the last wave.
Too fast, but worthwhile
When I asked my panelists at the China travel conference what was the most frustrating thing about working in China, most of them called out the pace of change – that things were happening so fast it was hard to keep up.
Yet when I asked them what was the most exciting thing, they also called out the speed of change and the open-ness of local consumers and industry players to embrace change.
And that pace of change, that complexity across markets, and that fragmentation of customers, can only be addressed by deeper, more meaningful localisation by global brands.
In other words, go local (seriously) or go home.
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