Qunar grabs over a third of revenue via mobile channels
Qunar has reported its mobile revenue at $22.9 million for the second quarter of 2014, an increase of 512% year-on-year.
The metasearch engine claims the cumulative downloads of its mobile app has now reached 270 million.
Total Estimated Flight Ticket volume (TEFT) and Total Estimated Hotel Room-night volume (TEHR) for the period were 19.1 million and 7.3 million respectively, an increase of 66.1% and 105.2% YOY.
Qunar’s mobile channel has contributed 38% of TEFT and 58% of TEHR, numbers the company claims as “industry leading”.
CEO and co-founder Chenchao Zhuang says:
“One thing that is particularly exciting is the tremendous room for further growth.
“We have by far the largest user base in the industry, but online travel still accounts for just around 10% of China’s travel market, compared to the around 50% in most of the markets in the west. And the mobile makes up only a portion of that 10%.
“The paradigm shift from offline to online, particularly to the mobile is a massive force. We anticipated this and have been at the forefront of the movement.”
Total revenue for the period was $64.5 million, an increase of 127% year-on-year (YOY) and 19.4% quarter-on-quarter (QOQ), this is the highest revenue growth rate over the last ten quarter earning periods.
However, the company reported an increase in losses of $68 million, compared to $29.84 million in the first quarter of 2014 and $6.7 million in the same quarter last year.
Qunar claims this is due to investment in product development, product sourcing (details below), and marketing initiatives.
“We witnessed another strong quarter of accelerating revenue growth and impressive volume growth across our business units, driven by market share gains and pricing leverage. Returns on our investments have been coming in earlier and quicker than we had expected.”
Some 90,000 holiday package products were added in the second quarter alone, taking the total to now over 400,000 products.
The GMV (gross merchandise volume) of holiday packages business reached $81 million in this reporting period. Outbound travel contributes about 50% of this GMV.
“Tour is a segment with low level of online penetration, but high levels of product diversity. And online marketplace model has its natural advantage in terms offering consumers the greatest number of choices and the best value.
“Tour package GMV maintained its rapid momentum, expanding by more than five times year-on-year.”
Qunar signed up over 72,000 hotels during this period, taking the total direct contracted hotels to over 165,000.
The total number of hotel reviews on Qunar grew to 3.3 million, up from 2.3 million for the first quarter of this year.
The company claims over 27,000 reviews are added to Qunar platform (desktop + mobile) on busy days, with about 50% coming via its mobile app.
Also, the number of hotel pictures in user reviews more than doubled between the first and second quarters of this year.
Other financial update
For the second quarter of 2014:
- Flight revenue grew 143% YOY.
- Pay-for-performance (P4P) revenue was $61 million, an increase of 137.4% YOY and 18.7% QOQ. Among this,
- P4P flight and flight related revenue was $45 million, an increase of 143.3% YOY.
- P4P hotel revenue was $11.5 million, an increase of 79.5% YOY.
- Product development expenses were $29.3 million, an increase of 181.6% YOY, this is primarily due to an increase in salary, and headcount related expenses.
- Product sourcing expenses were $10.9 million, an increase of 416% YOY, this is primarily due to an increase in product sourcing headcount.
- Sales and marketing expenses were $34.7 million, an increase of 212.4% YOY, this is primarily due to an increase in salary expenses as a result of increased headcount, and an increase in online marketing expenses.
As of 30 June 2014, Qunar had cash, cash equivalents and short-term investments of $211 million.
Related read: Qunar’s first quarter 2014 earnings – Qunar reports over 400% revenue growth via mobile channel