Tuniu.com is planning a three-year blitz on the Chinese online travel market following last week's $500 million funding from a group of investors including JD.com and Ctrip.
CFO Conor Yang told Tnooz that the money had been earmarked for a number of corporate uses, all of which are intended to "speed up expansion and strengthen market leadership."
"We will be looking at M&A. Package businesses, tour suppliers and wholesalers, anything which we could vertically integrate into our overall product mix."
Tuniu differs slightly from the major Chinese OTAs such as Qunar, Ctrip and eLong in that its focus is on package tours rather than independent travel. "These businesses are competing fiercely for market share in hotels and air booking, whereas the fastest growing area in China is leisure packages," he said.
While all of Tuniu.com's business is sourced online from mobile and desktop, it does have a number of offline "service centers" dotted around China where its consumers can enquire and manage their bookings. Within three years it wants to have 1000 of these centers at various departing cities in China. Yang insisted that "these centers are not retail outlets."
Tuniu also plans to have "reps" and is looking to have 100 international service centers which will liaise with its customers while they are in resort overseas.
"Research and development, especially into mobile" and "branding" are also lined up for serious attention courtesy of the $500 million investment.
Yang said that the strategic partnership with Chinese online retailer JD.com, announced as part of the funding round, would give Tuniu access to one of China's biggest e-commerce customer bases. Tuniu will offer everything it sells on its own desktop and mobile platforms to JD.com users.
Another investor in the $500 million round was Ctrip, which put $20 million into the business and with whom Tuniu also has a partnership. Yang explained that the partnership is based around cross-selling, with Ctrip selling a lot of Tuniu.com cruise product on its site while Ctrip is the major provider of standalone air, hotel and car inventory to Tuniu.com.
Tuniu.com appears to have absented itself from the market share obsession of the OTAs and is prioritising its package tour business. While some international Chinese travellers are starting to self-package, tours are still the most popular way for Chinese people to see the world. If Tuniu can take control of this sector it has a bright future, although the size of the opportunity makes Chinese outbound packages an inviting proposition.