From the Tnooz archive – Emerging markets (2012) and Groupon opportunities (2011)

Rolling back the years…

On 17 January 2012:

Who wins in emerging online travel markets? Locals do

If we look at online travel around the globe, we can see that the four key global emerging markets – Brazil, Russia, India and China – are showing substantially greater growth than the developed world.

Serge Faguet, co-founder of Russian online travel agency Ostrovok, argued that locally created and run businesses were the most likely to succeed in the emerging travel markets of Brazil, Russian, India and China.

Being local gave businesses “an overwhelming advantage”, he said, not least apparent large pools of capital, global supply bases and experience of established and foreign players didn’t necessarily count in the long run.

He may be right. Established players are increasingly choosing to partner with a local business, rather than build from the bottom up, in many markets.

It is perhaps why giants such as Priceline and Expedia have chosen to acquire or invest in businesses such as Agoda and Trivago respectively. Use the war-chests wisely, rather than opportunistically.

On 16 January 2011:

Four ways Groupon might work for travel businesses

Talking about Groupon gets people hot under the collar – and Stephen Joyce’s excellent post last week, with all the related comments, proved it once again.

In the face of adversity and huge sceticism, one of our Nodes, Daniele Beccari, decided to take the opposing view on the rise of deal sites such as Groupon.

He argued that there were many reasons for businesses to use these sites, giving them access to new business at sometimes low costs, a chance to create viral buzz, shaking up the marketing strategy and opportunity to cross-sell.

Two years on and the daily deal sector hasn’t turned out as many in the industry thought it would. Groupon has struggled, Travelzoo’s Local Deals platform arguably has yet to reach its full potential, and countless similar sites have come and gone.

Indeed, some are almost basking in its relative demise.

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  1. Psycho

    I’ve covered a bit of “locals over globals” topic in my recent article:
    Yes, Sergey is right that locals do have some competitve advantages, though Ostrovok, for example, didn’t yet manage to overcome on the online hotel booking market. Maybe there are 2 things here to notice:

    1. First of all it’s all about habbits – as users get used to one site, it becomes difficult to turn them to using the other. In Russia, however, there’s a huge amount of people who don’t use online hotel booking sites and maybe this can be reserve for an Ostrovok to grow on.
    BTW, I noticed that Ostrovok marketing is quite strange. It claims that it has the largest amount of hotels in Russia onboard but turns marketing efforts to promote its usage for travellers abroad (and that means selling Expedia inventory in general).

    2. It’s about global player fitting into the local mentality. allows to pay for the hotel on arrival (and that can be done in cash). That’s what Russians like and it’s much harder to make them pay for hotel beforehand. Ostrovok also allows such things but not for every hotel.


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