Chinese Travel Site Qunar Doesn’t Care About Any Labels Other Than ‘Largest’

Qunar didn't take after Western travel site business models. (PlaceIt) Chinese travel site Qunar — what is it? Is Qunar the Chinese version of Kayak, Expedia, or TripAdvisor, or is it something else? The largest travel website in China in terms of traffic, dwarfing competitors such as Ctrip and eLong, Qunar gets about half of its volume from its controlling shareholder, Baidu, the country’s largest search engine. Putting a label on Qunar, which executed an IPO on Nasdaq in November, raising $167 million, and has been growing exponentially, is tricky, but spokesperson Jenna Qian isn’t too worried about it. “We don’t think metasearch or being an online travel agency is that important a concept,” Qian says. Qunar was founded as a travel metasearch site in 2005, but by 2011 it had evolved into a hybrid to better-address the needs of the largely offline travel market in China. In particular, with so many airlines and hotels still offline, and with these companies lacking the resources to create spiffy websites, Qunar had to come up with a way to improve travelers’ online user experience. When pressed, Qian says Qunar is part Kayak, Expedia, TripAdvisor, TripIt, and OpenTable, as it contains elements of each, although officially Qunar is a “search-based commerce platform.” With such an amalgam of features and processes, you have to wonder how many shareholders buying into the Qunar IPO really understood the business. After all, Qunar resembles Expedia in some respects, and Kayak in others, because it is a booking site like Expedia, with the vast majority of bookings taking place on Qunar without users having to navigate away to a third-party site. And it is similar to Kayak because Qunar aggregates the inventory of myriad airlines and hotels, and gets its revenue from them based on a cost-per click advertising model. Qunar argues that the analogy to Kayak, though, only goes so far because where Kayak will have a handful of online travel agencies dominating search results, Qunar claims to have relationships with 1,500 OTAs. When making a booking on Qunar.com, travelers perceive they are booking through Qunar, although the airlines or hotels are actually responsible for customer service. Qunar handles these bookings through an SaaS (software as a service) platform, which contains booking, inventory management, and marketing capabilities, that it provides to airlines and hotels for free. In this way, Qunar has parallels to OpenTable, which provides booking and connectivity services to restaurants. Qunar believes providing a booking and marketing platform is necessary because the China travel market is so fragmented and most companies are not online and don’t even have IT staffs, Qian says. But, Qunar isn’t all about booking. Qunar also covers the dreaming stage of the travel cycle through photo-sharing, has a TripIt-like tool for itinerary organizing, although it isn’t as robust, and Qunar is on the cusp of launching its own destination guides. In addition, Qunar offers TripAdvisor-like user-generated hotel reviews, which are supplemented by volunteers who do hotel inspections, and the site offers sharing tools for social-oriented travelers. Breaking the Mold On Airline Tickets Qunar defies stereotypes in other ways, as well. While many U.S. and European sites view airline bookings as a loss-leader, Qian says selling airline tickets is currently more profitable for it than hotel bookings because Qunar started out primarily as an airline ticket site, and it has reached scale in the flight sector. Profitability in hotel sales, Qian says, is taking a back seat for now because Qunar’s cost of sales, including marketing, and R&D expenses, are much steeper for hotels than for air. What’s Next? Qunar raised $167 million in its IPO with the intent to use the net proceeds for technology expansion, sales and marketing, and potential acquisitions. In addition to building out its hotel product, Qunar sees a lot of potential in broadening out into vacation packages and tours. Potential acquisitions likely won’t lean toward geographic expansion, but would tend to be for “companies with unique resources and technology that would be complementary to our business,” Qian says. That’s because although Qunar already partners with global companies such as Expedia, Orbitz, and Booking.com, Qunar is not focusing on bringing travelers to China, but instead is intent on capturing demand from outbound Chinese travelers. In that regard, like other travel companies around the world, Qunar is building up its business by tapping into the explosive market for Chinese travelers seeking to explore the world. And, as a hybrid travel company, part Kayak, a bit Expedia, with a dose of TripAdvisor and OpenTable, but overwhelmingly still Qunar, the Chinese “search-based commerce platform” is doing things its own way. This article originally appeared on Skift, a Jing Daily content partner. Additional links from Skift: How the New York Times Travel Section Makes its ‘Places to Go’ List Marriott Unveils Pinterest-Style Meeting Planner Portal Best Travel Ads This Week: Turning U.S. Towns Into World-Renowned Destinations

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Chinese Travel Site Qunar Doesn’t Care About Any Labels Other Than ‘Largest’