Applying the `car and horse cart' analogy to the OTA business in China
Published: 25 Sep 2008
By EyeforTravel.com Correspondent, Beijing
eLong is diligently working on its `4G' strategy as the online travel company pursues its mission of redefining the standard of online travel business in China.
eLong's CEO Guangfu Cui, a speaker during EyeforTravel's Travel Distribution and Sales China 2008 conference in Beijing, stated that 4G stands for Guarantee, Go-online, Global and Green.
Before sharing his plans, Cui used an analogy to describe Chinese consumers in the context of their usage of sites like eLong.com.
"The situation is more like the way the two modes of transportation in car and horse cart used to compete 100 years ago. When car was invented, it ran slower than horse cart and was much more expensive. Some people claimed that the new invention would never be able to beat horse cart as the main transportation vehicle. The car only took off when Mr. Ford changed the industry by making it run faster, but priced cheaper, than horse cart. My job is very much similar to that of Mr. Ford, which is to get booking online for Chinese consumers faster, easier, cheaper and much more intelligent than call centre."
Elaborating on the 4G concept, Cui said under Guarantee, the company is focusing on availability of
24/7 high quality service, low price/room availability guarantee, trustworthy price information and customer satisfaction.
Specifically on the company's call centre service, Cui said, "Our research in June 2008 indicates that 99 percent of our customers are satisfied or very satisfied with the eLong call center service, of which 88 percent are very satisfied." On how the research is done, he said, "Customers are asked to give immediate evaluation of our service at the end of their calls to our call centre. The service quality is classified as Very Satisfied, Satisfied, Average, and Not Satisfied. In June 2008, approximately 30 percent customers gave their evaluation."
Under `Go-online', Cui referred to facilitating the decision-making process with features such as intelligent hotel map search function, customised 360 degree display of hotels, air ticket dynamic price search/display and credit card and debit card online payment.
For `Global' component of the strategy, Cui spoke about the partnership with Expedia. He also referred to initiatives such as translating global hotel information into Chinese and upgrading international ticket search.
Lastly, Cui shared that the focus is on `green travel'. "eLong advocates the elimination of the paper itinerary," he said.
Commenting on the future of the travel distribution business, especially online travel, Cui said, "It is hard to project the future because the future will be shaped by how the current and potential players will compete."
"The shaping forces are variables themselves. However, three moments of truth are going to hold the key in deciding the winner – when consumers plan a trip, where will they go for help; during the booking, who can provide the easiest, simplest, most intelligent and low cost transaction; after using the products/service, are customers happy with the actual products/service (i.e. is the customer happy or not with the hotel he or she booked through a distribution company)," said Cui.
According to Cui, there are several factors that impact the speed of online travel transaction or payment. "These are - personal computers penetration (no one feel safe to use credit card via a public computer); credit card penetration - my estimate is that credit card population is about 30 million if you take out the fact that one person may have several credit cards; Internet access penetration. As the penetration of these three things increases, the online travel booking will take off."
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