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Tongcheng-Elong continues to swell its paying user base

11/26/2021| 12:45:31 PM| 中文

The OTA has taken its paying user base from 152 million in 2019 to over 196 million by the end of Q3.

ChinaTravelNews, Ritesh Gupta – Tongcheng-Elong has capitalized on its improvised strategy and competitive advantages in the last year or so to post a sizable growth in its user base. 

Online travel companies in China continue to assert that there is plenty of scope when it comes to collectively expanding the penetration of OTAs. 

And for its part, Tongcheng-Elong’s ploy to garner new paying users, including on the WeChat platform, from tier-3 or below cities in China continues to work. 

The fact that the industry faced a setback when travel restrictions were imposed in late Q2 and the contribution of Tongcheng-Elong’s accommodation reservation slipped from 35.8% to 33.3% when compared with Q3 of 2020 and the OTA still managed to grow its revenue in other categories, for instance, in the bus ticketing segment, shows the OTA has worked out ways to target consumers with relevant offerings. 

The company has been looking across the journey of a traveller to ensure their needs are met at a relevant touchpoint and this also improves upon the average order value. So if on one hand, the OTA has capitalized on traffic from the ground transportation segment and promoted accommodation and air ticketing businesses to them, on the other the QR code scanning options at hotels and expanding the coverage of bus ticketing vending machines are resulting in digitalization of bus operators and tourist attractions.  

Improving on key KPIs 

Total GMV increased by 3.5% year-to-year to RMB41.1 billion Q3, as business volume continued to recover.  

The company had ended 2019 with annual paying users reaching a record high of 152.4 million. And at the end of July-September period of this year, the figure stood at 196.1 million. 

Comparing the average monthly actively users (MAUs) and monthly paying users (MPUs), two other key performance indicators (KPI) in this business, Tongcheng-Elong has managed to grow substantially during the pandemic. 

The company ended 2019 on a high - average MAUs rose by 17% or so to 175 million and its average MPUs increased by 34.5% to 26.9 million. Evaluating the performance of the last seven quarters i. e. till the third quarter (Q3) of 2021, average MAUs is now over 276 million and average MPUs increased to 33.6 million. 

Growth in crisis  

The OTA dealt with the ongoing crisis by focusing on the prevalent demand in various cities, targeting traffic from various sources and also sharpening its cross-selling strategy to improve paying ratio from its consumers. The company has been promoting cross-selling across different services, including transportation, accommodation, and tourist attractions, by refining its algorithm as well as improving its inventory management and coverage. Also, value-added services such as advertising, in-store dining and hotel facilities vouchers have been developed for the accommodation business. Also, the cooperation with hotels was strengthened to set up QR code scanning functions. 

Revenue garnered from the accommodation reservation services category was almost $645 million, accounting for 33.3% of the total revenue generation. 

The transportation ticketing segment increased its contribution from 55.1% to 58% for the same comparison. A highlight was nearly 250% increase in bus ticketing volume, compared with the third quarter of 2019. 

Continuing with what’s working 

On the product side, the OTA has been strengthening its inventory and building on user experience metric. Also, Tongcheng-eLong’s is emphasising its positioning as one-stop shop platform, with tools ranging from planning, booking and pre-departure phase (including automatically purchasing tickets at specified time slots and price range) to on the road (meals, pick-up etc.) to arrival (transfers, transportation, hotels etc.). 

This is being backed by expansion of reach and evaluating intent of shoppers. The decision to garner more users from lower-tier cities and its plan to count on its association with the Tencent ecosystem to drive traffic to its mini-program based platform from various channels on Wechat are delivering. 

The team at Tongcheng-Elong underlined that it continues to reap rewards of having a thorough understanding of WeChat users. In the July-September period of this year, the WeChat mini-program contributed almost 80% of its average MAUs. 

The company is deeply integrated with Tencent-based platforms. Some of the applications are the Rail & Flight, and Hotel portals in WeChat Wallet and QQ Wallet, plus it also features the mobile payment interface of Tencent’s WeChat and Mobile QQ.  It also counts on the drop-down list of users’ favourite or most frequently used mini-programs.

In addition to this, the marketing team is making use of novel product offerings and offline traffic sources. Referring to the popularity of the “Blind Box of Air Tickets” initiative, which gave user an opportunity to purchase a one-way flight ticket from an appointed departure location to a randomly assigned destination on a random day, the team shared that it went viral across social media platforms in China and helped improving the brand recognition. 

TAGS: Tongcheng Elong | OTA | GMV | WeChat
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