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Mobile saturation in China equals rise in M-commerce

08/07/2015| 4:31:51 PM|

Half of all outbound Chinese travellers used apps on their smartphones to plan and book trips on the site, up from just 17% the year before.

The recent release of the Chinese International Travel Monitor (CITM) 2015 from Hotels.com found that online, and in particular mobile, bookings have spiked in the last year. Half of all outbound Chinese travellers used apps on their smartphones to plan and book trips on the site, up from just 17% the year before.

This finding is at once striking as it is familiar – the staggering growth and the ubiquity of smartphones, combined with accessible WiFi and declining local data charges, suggests the trend for m-commerce in China is only set to accelerate.

There is, however, some nuance to the story. Some experts believe the peak of the smartphone market may have already passed, as data from global market intelligence firm IDC shows the Chinese smartphone market contracted by 4% in the first quarter of 2015, the first decline in six years.

“Smartphones are becoming increasingly saturated in China. China is often times thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones, similar to other mature markets like the US, UK, Australia, and Japan,” said Kitty Fok, managing director of IDC China.

While smartphone growth may have slowed, it has by no means ground to a halt. eMarketerestimates that by 2018, 700 million Chinese will own smartphones. This alone should pique the interest of the travel industry: there is a high correlation between the use of smartphones and the growth of e-commerce.

Jeanette Phang, director of business intelligence at media agency OMD China, said: “Smartphones opened a whole new category of e-commerce consumer in China and is now integral to the shopping experience. The Chinese consumer is extremely comfortable with the idea of the smartphone as a wallet. If mobile usage is affecting all areas of a consumers’ life then it too will change the way they book travel.”

eMarketerestimates that by 2018, 700 million Chinese will own smartphones. This alone should pique the interest of the travel industry: there is a high correlation between the use of smartphones and the growth of e-commerce.Jeanette Phang, director of business intelligence at media agency OMD China, said: “Smartphones opened a whole new category of e-commerce consumer in China and is now integral to the shopping experience. The Chinese consumer is extremely comfortable with the idea of the smartphone as a wallet.

Katherine Cole, regional director at Hotels.com, agreed. “We live in a highly connected and digital age where we have access to a myriad of information at our fingertips, and travellers today expect no less from the travel industry.”

The appetite for convenience as well as impulse bookings are cited as reasons behind the spike in mobile travel bookings.

“Travellers are looking for value and convenience on all platforms, and as we see more and more traveller interactions move online, hoteliers will also need to head in that direction in order to compete effectively,” Cole added.

Chinese OTA giant, Ctrip, has already cottoned on to this. Its first quarterly report this year showed a 550% ump in the number of downloads for its mobile app, bringing the cumulative total to 800 million downloads. Mobile alone accounted for 70% of online transactions.

What can hoteliers, and the wider travel industry, do to catch up?

In short: Marry a strong mobile campaign with a responsive mobile website or app.

Explainded OMD China’s Phang: “Your m-sites and apps should not be a scaled down version of your website. “It should be your starting point. More than ever, every marketer needs to realise that your digital product is never finished – there is always more to do and areas to improve.”

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TAGS: M-commerce | mobile | Hotels.com
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