7zhou receives RMB10 million investment
7zhou has completed a pre-A financing round raising RMB10 million investment from Shanda Capital, the investor of travel startups Weekend Travel, and Maitian Club.
TravelDaily – TravelDaily has learned that low-profile destination travel and activity booking website 7zhou has completed a pre-A financing round raising RMB10 million investment from Shanda Capital, the investor of travel startups Weekend Travel, and Maitian Club.
With positioning similar to Viator, the most successful international destination travel startup and acquired by Tripadvisor for US$200 million, 7zhou became China’s first destination travel website when Weijun Ding established personal website to share his love of travel in Guangzhou in 2008. It began offering outbound travel destination functions in 2011 with bookings for daytrips, road trips, shuttle services, Chinese-speaking guides, attractions, scuba diving and angling, and has extended coverage to 90 countries and regions.
Laying the groundwork
Mr. Ding said 7zhou has dedicated its efforts in the last few years to building up its resources and distribution in each destination. “Our strategy for the future is to continue to negotiate purchases one supplier at a time. This has been a laborious task for our small team but we will expand our purchasing department to 100 people by the end of this year, with half of the team engaging in product purchasing,” he said.
The company adopts the unusual practice of devoting heavy resources to offline purchasing on a global scale. “We have personal experiences with each of our products. After we have tested every product we recommend the interesting ones to users. I’m a layman when it comes to the travel industry so I can look at problems from a traveler’s point of view and hopefully we can introduce fun activities to everyone,” he said.
7zhou maintains an inventory of 15,000 products units mainly in Southeast Asia, East Asia, Oceania and Europe and look to expand coverage to 170 countries in the future. Explaining its strategy of going for breadth rather than depth in destination coverage, Mr Ding said: “We are looking at the real needs of the customer. Once a customer has visited a destination, he’s definitely looking for a different place than spending time and money in the same place. This customer need is driving our horizontal development and our expanding scope.
“We will discover even more interesting activities in each destination, expand our dining experiences resources and add a new section for specialty accommodation products.”
He also said the company will still face many challenges in execution because suppliers at the destinations are fragmented, small scale, and have a low level of digitization, increasing the company workload. In response, 7zhou will use the latest funding to develop a back-end management system for global suppliers to record inventory and confirm orders in real-time. “We launched a prototype for testing and once the functions are perfected it will increase the effectiveness of the management and booking experience,” Mr Ding said.
Relying on word-of-mouth marketing
“Mobile devices are extremely important to us because the devices are more suited for bookings for destination travel than for air ticketing or hotel bookings. 7zhou has 100,000 users but only 10,000 downloads of its app, so there is a lot of room for growth,” he said.
“7zhou has maintained an astounding 500% annual growth in bookings, but we have never put our funds or energy into advertising. Instead we are always fine-tuning our work internally in the hope of servicing every customer and become known through word-of-mouth. Our first customers have been with us for two years already and we have a 20% repeat rate for old customers. We also hold offline events in every city where users can share their experiences while finding partners for future trips.(Transaltion by David)
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