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Shiji’s deal with Baoku lends a new dimension to platform strategy

04/10/2018| 8:01:16 AM| ChinaTravelNews 中文

In addition to knowing about consumers’ activities, Shiji is set to learn details about their business travel via Baoku’s cloud-based travel management platform.

ChinaTravelNews, Ritesh Gupta – Shiji has asserted that the recent signing of a deal to acquire the majority stake of Baoku Online is a step towards understanding the digital as well as the offline/ physical footprint of consumers via consolidation of Shiji’s role of being a platform operator.  

Shiji, with more than 50 subsidiaries in their portfolio, not only intends to target the travel management service market in China, but the team is also focused on consolidating business offerings that provide insight into consumers’ activity. So, in addition to “eat, sleep, shop and play”, the “business travel” component is being added.

Shiji underlines that their technology isn’t disjointed; rather it is about actionable data via connectivity. This investment would complement the group’s existing competencies in PMS, POS, Tourism Destination solutions, retail solutions etc. So as technology connects more systems, including transactional ones within a particular sector, this way data about consumers gets aggregated in one platform.

“The development marks the strengthening of platform services that Shiji, as a group, has to offer,” says Kevin King, Chief Operating Officer, Shiji.

“We have property management systems (PMS), point of sales (POS) systems etc.…these are all cloud-based. CHINAonline connects all of the hotel business into the Baoku’s platform and then being able to extend the platform into the travel management space would mean that companies availing this platform for travel management would be able to have access to hotels via the CHINAOnline channels. So, the platform wouldn’t be just used for flight bookings, but also for other aspects of travel, including hotel accommodation,” he added.   


Kevin King, COO of Shiji

By foraying into the travel management space, the platform would add data related to “work” or “business travel”.  

“As the volume of business travel goes up over the platform (for instance, by adding hotel booking options), then the “profile” of a consumer gets detailed (the ecosystem is focused on crafting one id of consumers, naming it as “Unified ID”) plus the likes of hotel companies, too, benefit by targeting the business travel segment better. This objective is to go deeper into transaction processing of business travel as well,” said King. “So we would be able to take our offering (for consumers) to the corporate side, in addition to the consumer-end/ private or social side.”

In essence, the company is continuously on the look-out for transactional systems that are associated with the life of a consumer, and that’s key to consolidating the ecosystem via their platform technology. “And this is only possible when there is a platform and strategy is in place banking on true cloud-based scalable solutions. We must look at the market demand and must continue to provide technology solution platforms,” asserted King.

Synergy

As for Baoku, a couple of areas where the company would benefit from the synergy:

Strengthening of Baoku’s cloud-based platform: King mentioned that Baoku Online is focused on providing their platform technology to travel management companies. “Baoku has lot of connections into the airline systems whereas CHINAonline, a division of Shiji, have connectivity with hotels. Being able to provide the supply chain the supply of hotels through the Baoku platform, taking this into the travel management space with hotels, airlines, trains, car rental etc. consolidates the overall offering and adds to the power of the Baoku platform. Eventually all of this augments the ecosystem and Shiji platforms,” he said.

Baoku has developed an application software for major Chinese airlines. “From the platform that Baoku has created over the years, they have built the channels to the airline systems, the car rental systems and to a lesser extent to the hotel industry, and their solution provides the front-end corporate user experience. It enables the employees to make their reservations/ travel arrangements based upon their companies travel policies,” mentioned King.

A business traveller can initiate a request for travel, receives his/her manager’s approval, makes reservations, claims expenses, receives approval, etc., all through one system being offered by Baoku. But King points out that the user experience, especially in terms of meeting trip essentials, would now get better. “With all the connections that Baoku has, we are able to process those requests and transactions based on companies’ policies. So if you are allowed to stay in a particular hotel category, say 4-star hotel, or allowed to travel only in the economy class, then we would show you hotel or flight options accordingly. The travel management solution is there to control the employees’ user experience, what they can or can’t do in terms of bookings.”

Doing away with travel “coordinators”

The business travel market in the domestic market is riddled with challenges. For instance, travel expense policies tend to be tough to comprehend. Other areas include streamlining of how employees enter expenditure incurred and how the same is being managed (manual processes, handling of paper receipts etc.); analytics around employees travel expense and evaluating what needs to be done to optimize the same along with low transparency of the business travel fee are some of the challenges.

For their part, Baoku, in addition to refining the user interface for employees, has been attempting to make operation processing simpler via their administration interface, featuring handling of order processing, personnel management etc.

As for pain points in the travel management service market in China, King referred to management of air or hotel bookings as per the compliance of travel policies that have been laid down by big organizations with offices in China or even outside the country.

“So many companies have different travel coordinators – for various aspects of travel. What this (deal) enables us to do is to provide an enterprise a single source of travel management that would control the journey of the corporate traveller, utilizing the economies of scale and reducing the expense because of the buying power (could be of the spender or Shiji-Baoku ecosystem). Even Shiji has different travel coordinators (for their own travel management requirements). So this route would be apt for us to streamline requirements and plan for cost savings,” shared King.  

On how cloud deployments are improving the whole category of business travel and expense management, King said, “That’s (cloud) the whole key. We need to scale up across various enterprises that intend to use travel management (solution). In many countries, such solutions are widely used and for big organizations acts as tools to cut down on their expenditure and make savings. And for this we need cloud for quick deployments and then quick updates for the product to work (as planned), making the best use of channels and functionalities, Baoku’s technology and knowledge of the industry is part of their strengths - being robust and scalable.”

TAGS: Shiji | Baoku | investment
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