China's Exploding Online Penetration Leads to Expanded OTA Offerings And Platforms

As Alibaba sits perched on the edge of what could be the largest IPO in history, all eyes are on China's e-commerce marketplaces. And as the country's consumers flock to online and mobile shopping channels, travel is one of the industries driving the shift. China's online leaders have the experience, talent and determination to innovate; its tech-savvy traveler base is poised for considerable growth; and its quickly evolving online environment revamps business models and offerings at a rapid pace.

China's online travel gross bookings reached US$18.2 billion in 2013, second in Asia Pacific (APAC) only to Japan's, according to Phocuswright's newly released Asia Pacific and Global Edition publication, China Online Travel Overview Seventh Edition. With annual growth of 26 – 27%, online bookings will account for more than a quarter of all travel bookings by 2016, when China's online travel market will surpass Japan's to reach $37.1 billion.

With China's overall and online travel markets poised for massive growth, intermediaries are the real agents of change: developing new technology, putting aggressive merchandising techniques to work, and unveiling new product lines.

"China's online travel agencies (OTAs) are diversifying their offerings well beyond the traditional air and hotel," says Maggie Rauch, Phocuswright research analyst. "Ctrip, eLong and Qunar have become travel smorgasbords, selling vacation packages, attraction tickets, cruises, ground transport – just to name a few. They increasingly cover the entire travel cycle – travelers use their sites and apps to research, shop for, and purchase travel, as well as share feedback. And beyond OTAs, other travel planning platforms are evolving. Metasearch sites are hosting travel transactions, and shopping mall sites are featuring more travel content."

The shift toward mobile channels – a global phenomenon in travel – has been particularly acute in China. In 2013, 23% of OTA bookings were made on a mobile device, increasing from 1% the year before. OTAs have made mobile development and marketing bigger priorities, overhauling their apps and offering discounts for booking via mobile.

Phocuswright's China Online Travel Overview Seventh Edition presents market sizing and projections for the total and online leisure and unmanaged business travel markets in China from 2013-2016. The report also outlines the key trends that will shape China's travel market in the years to come.

Report highlights include:

• Total market and online leisure/unmanaged business travel bookings for 2013 – 2016
• Bookings by major travel product segment – air, hotel, rail and car rental – including discussion of key players and segment dynamics
• Detailed online travel market analysis, including online penetration, share by segment, and unique characteristics
• Comparison of online travel agencies (OTAs) versus supplier websites, including key players, bookings and projected growth rates through 2016
• Examination of the OTA landscape – local versus global players, recent activity and comparison of business models and offerings
• Continued importance of offline fulfillment and the role of traditional travel agencies
• Impact of the mobile channel on online travel shopping and purchasing
• Importance of social media platforms and online reviews in travel research and planning

Get the numbers and need-to-know facts and analysis on China's large and rapidly advancing travel marketplace with Phocuswright's China Online Travel Overview Seventh Edition.