asia tech
680 days ago
 

All you need to know about travel technology in Asia in 2013

If you’re considering business opportunities in Asia in 2013, here are a few things to heed.

1. Low cost continues to drive change

The low cost effect is already in full swing in South East Asia and competition will be intense this year as Scoot gets up to speed, players consolidate and take position in Indonesia and India (Tiger buys into Mandala; Etihad scoops up an ailing Kingfisher) and AirAsia and Jetstar battle it out for market share.

Already the AirAsia group flies more passengers (18 million) than Singapore Airlines (16-17 million) and, this week, put in a purchase order for 100 more A320 aircraft, pushing its total fleet size to 475 narrow-bodies.

Watch the space in North Asia in particular – Japan gets into full stride; China’s Spring Airlines expands internationally; and Korea’s Jin Air and Jeju Air start exploring overseas points.

Jetstar Hong Kong (a partnership between Qantas and China Eastern) takes a go at the former British territory and Cathay Pacific may respond with its own low cost venture.

Better action promised on this front than in Peter Jackson’s Hobbit: The Unexpected Journey.

2. The rise of China’s affluent

This is a market everyone selling anything from luxury handbags to premium beds to wild dreams is going after.

In its Age of the Affluent report, Boston Consulting Group says that “at 120 million strong and with $590 billion of buying power, the affluent class is not yet as large as the emerging and current middle class combined, nor does it have the same spending muscle. But it is growing fast”.

By 2020, it projects that this segment will grow to 280 million, which will account for more than 30% of its urban population.

The report says that the spending of the affluent will grow fivefold to $3.1 trillion, about 35% China’s total consumption and more than 5% of global consumption.

It will also be nearly as much as Japan’s total consumption, 28% greater than that of Germany, and three times more than South Korea’s total consumption.

These numbers will seduce, and burn, many, just as in Zhang Yimou’s House of Flying Daggers.

3. OTAs get set for battle

MakeMyTrip buys Hoteltravel; Webjet buys Zuji; and Priceline buys Kayak – all harbingers of a big battle that will be fought on Asia’s shores.

Webjet will go head-on against Wotif as the two Australian-based businesses make their move in “The Asian Century”, as declared by the Australian government.

Wotif has the first mover advantage and has appointed Scott Blume, the guy who launched Zuji all those years ago, to take them further.

But Webjet will come in all guns blazing – this is a company used to fighting hard. MakeMyTrip has to move beyond “the India story” and will make further acquisitions to buy growth. Priceline Group will step up activity in Asia and use its two brands, Booking.com and Agoda, to scale across and dig deeper into markets.

AirAsia Expedia, the joint venture that was supposed to be a game-changer at the time it was signed has not scaled to the extent dreamt of by its chiefs but don’t write it off just yet.

The hero may yet make a strong comeback despite being weakened.

4. The fun will be in the emerging markets

Beyond the Chindia story, the juicy narratives (all with special local flavours) will be told in markets such as Indonesia, the Philippines, Vietnam, Thailand, Myanmar, Laos and Cambodia.

Mobile and social will lead change in Indonesia, and local players will hold strongly to their domain, but competition from outside is coming in as global players jostle for position.

Competition will also be intense in Vietnam – so look to global brands setting up local language websites. Phuong Tran Ming, CEO of Chudu24, predicts the “big guys – Agoda, Expedia, Hotels.com, Booking.com – will have Vietnamese sites and start doing marketing in Vietnam” and that “new local sites will launch every month” and “Groupon-like models will take a piece of the cake”.

Thailand is starting to see some digital startup activity – a new fund just launched this month M8VC Co which plans to invest at least THB 300 million (about US$9.4 million) in tech startups in the country – a small but significant step.

And while all the attention’s focused on Myanmar right now, Laos and Cambodia will also make progress in their own inimitable way.

5. Make local friends

The best travels are when you have friends in local places to show you around. The same with doing business in Asia. If you’ve invested in friendships over the years, then they will do you well in 2013.

If not, the going will be tougher. The good news is, more and more players are getting into the digital travel space which means more friends to be made. Build and INVEST in your networks not only for 2013 but the years beyond because Asia’s on the rise.

“The Social Network” must go from virtual to real.

Happy 2013 from WIT and our friends in Asia.

NB: Asia tech image via Shutterstock.

 
 
Siew Hoon Yeoh

About the Writer :: Siew Hoon Yeoh

Siew Hoon Yeoh is the editor-at-large for SHY Ventures and editor/producer of WIT-Web In Travel.

She created and manages the travel insider website The Transit Cafe and also runs WIT - Web In Travel, Asia’s leading travel distribution, marketing and technology conference, and the weekly WIT newsletter.

In 2008, WIT was awarded the Most Innovative Marketing Initiative by the Singapore Tourism Board. Siew Hoon is also an established speaker and facilitator at travel industry conferences and workshops.

She is also is a published author, having written titles including “Truth, Lies & Other Stuff” and “Around Asia in 1 Hr: Tales of Condoms, Chillies & Curries”.

 

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  1. David Urmann

    This is a good summary.. of all the big markets India has the largest % of travel purchases offline. Its a $24 Billion market with only $7 Billion online. Its the fastest growing in terms of online growth as these consumers start purchasing online. It will be a bad decade for corner travel agents in India.

     
    • Yeoh Siew Hoon

      Thanks, David. You’re right about India – a huge chunk waiting to move online. Same with the other markets as consumers gain confidence. Happy new year.

       
 
 

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