Qunar is the latest Chinese online travel business to report on a Q3 where revenues, mobile penetration and costs all saw big increases.
Head of communications Jenna Qian and chief strategy officer Yilu Zhao took time out to give Tnooz an explanation of the results in terms of the bigger picture rather than financial specifics.
The Q3s talked up mobile - no surprise there - with Qunar recording mobile revenues of $33 million, an increase of 445.1% year-on-year. Mobile accounted 55% of the 10m hotel room night bookings in the quarter and 43% of its 22.7m flight bookings.
This equates to 40.4% of total revenues in the quarter, compared to 15.4% last year.
"Our growth this year has to a big extent been driven by how quickly mobile has taken off in China. Out of a population of 1.3bn, internet penetration is 600m of which 500m are accessing the internet through smartphones.
We started investing in mobile and building an infrastructure in 2010, when even 4G was not there. We foresaw the trend, and when it finally took off we were ready."
Qian suggested that Qunar's mobile metrics were among the strongest not only in China but also on a global scale as well.
Mobile works on other levels, Zhao continued. It drives transactions (see above) but also helps build an online community.
"In Q3 alone, we added two million reviews to our site and close to 90% of these were submitted by mobile."
Qunar's shift away from its metasearch roots has been widely reported, although its air business still operates on a lead-generation CPC basis. Qian explained that "there are only three major airlines in China but some 20,000 distributors so metasearch can still play a bigger role in air here than in western markets."
But she also added that "very recently", Qunar has started working with airlines in a pseudo-GDS way, working directly with airlines to provide yield management and pricing strategy intelligence.
One example offered was its relationship with start-up carrier Qingdao Airlines.
"It asked us to sell tickets for its inaugural flight, on an exclusive basis. Not only did the flight sell out in three days, it was also profitable for the airline. We think this is the first time ever in the world that an airline's first ever flight has been profitable."
Qunar now offers big data and strategic technology to Qingdao. It is the only third party seller of Qingdao seats with Qunar working in tandem with the airline dotcom on pricing.
Zhao added that Qunar now works with ten airlines on their yield and pricing strategy.
Hotels are another area where Qunar claims that its differentiated approach gives it an advantage. For the first quarter ever, the majority of its hotel bookings were from properties with which it has a direct relationship. Said Qian:
"Our product sourcing team is about 2,000 strong, but we use technology to make sure they work efficiently. And once we have signed a hotel, it can be added into our platform and bookable by consumers within 24 hours.
"Compared with our peers, this speed of signing is a great advantage. In Q2 we added 72,000 hotels and in this quarter we added another 50,000."
Outbound is still a relatively small part of Qunar's business, although "international flights and hotels are growing four, five times every quarter, which is promising but still small compared with the domestic opportunity."
This is also the reason why an English language version of Qunar is some way off.
"We do get requests for an English language version of our site but we haven't directed the resources to it. Chinese is a huge market and the user needs are tremendous. An English site is on our 'to do' list but it's not being done."
The final word from Qunar is another observation about mobile. "It is also an important customer service channel because it gives our customers the option to self-help," explained Zhao, referring to the fact that Qunar has a call centre of around 500 people compared with its peers who are employing 15,000.
"This is the key point here. If you want to penetrate China's mass market - which is the majority of the Chinese market - you need to have a technology platform which will help you keep a relatively stable fixed cost structure. With revenues per unit in the mass market low, if your variable costs are high you can't be profitable. As China's labour costs go up, the only way is to stay competitive is to build scale through technology."