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Booking Travel in China: It’s all about OTAs, as China Now Has 751 Million Internet Users, Equivalent to Entire Population of Europe
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Booking Travel in China: It’s all about OTAs, as China Now Has 751 Million Internet Users, Equivalent to Entire Population of Europe
October 16, 2017 by Tom Berrigan
Ten years ago: “It is no wonder that so many of the newly-middle-class Chinese are taking to travel and even booking online. In 2006, 2.75 million Chinese booked travel arrangements … over the internet, according to the Shanghai-based marketing research firm iResearch. On the one hand, that is a very small number, amounting to a scant 2 percent of the 137 million internet users in China, reported at the end of 2006 by the China Internet Network Information Center. … It will take a while before the share approaches the 63 percent of US internet users who said in August 2006, that they had ‘bought or made a reservation for travel’ using the internet, according to our own statistics.” (From “The online and offline travel experience in China,”—Deborah Fallows, Pew Research Center, Aug. 3, 2007)
Circa: 2017: Since the above article, the numbers have changed–obviously. A recent report of the China Internet Network Information Center (CINIC) shows that the number of internet users in China increased by 2.7 percent over the first six months of 2017 to 751 million, and that 96.3 percent of internet users access it through their mobile phones, an increase of 1.2 percent point since the end of 2016.
In addition to making their travel arrangements using their mobile phones, Chinese have expanded their use of their smartphones for online food delivery services (274 million users); managing their money (126 million); and making online payments (502 million).
On the heels of the CINIC report, Eye for Travel’s new Chinese Travel Consumer Report 2017-2018 shows that online travel agencies (OTAs) or their apps are used for roughly 80 percent of travel bookings as airline travelers are forgoing direct booking with air carriers.
Chinese Flight Booking Channels When Using Apps
Chinese Flight Booking Channels When Websites
Some other findings from the Eye for Travel report include the following:
—The OTA dominance presents a marked contrast between Chinese and Western markets, where airlines have been able to hold their market share or in some cases grow it and illustrates the unique dynamics of this market, where smartphones and apps play a much larger role in the travel booking process than in the West.
—The report found a similar pattern for accommodation bookings, with seven out of 10 Chinese travel consumers booking through OTAs, compared to around one in 10 using a hotel’s website or apps.
—The struggle to take back market share will be made more complex by the concentration of the OTA market in China, with only a handful of players, and price sensitivity key for Chinese travelers. Ctrip, Qunar and Meituan-Dianping are the dominant forces, with the first two particularly strong in app usage, which will continue grow as China’s younger travel consumers, who favor smartphone and app booking, become a larger segment of the market.
—With more than nine in ten Chinese consumers visiting price comparison sites during research, these younger travelers have also been able to strengthen their market proposition by becoming integral players in metasearch, further entrenching their competitive advantage.
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