The rule of the net competition of the pedestrian cattle: survival under the Shadow of giants

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Titanium Media Note: After the trip to the U.S. listing in May this year, the share price in two months from the issue of 9 U.S. dollars to 18 U.S. dollars, market capitalisation doubled. Throughout the development of the cow, you will find that it has always lived in the line of three mountains under the pressure of tourism, but has been around the core of leisure tourism, and the Giants are not good at doing with the regiment swim to the extreme. This extreme, to some extent to help the cattle in the fierce competition in the survival and growth, but also restricts its business horizontal innovation to make it a relatively small company. "Business value" reporter Liu Yan June through a variety of interviews, comb out the way cattle in the giant shadow of the survival path, summed up as four laws:

Now it seems to be a matter of course that you can easily book a tourist line on the Internet by sliding your mouse. But 8 years ago, it was a blue ocean that no one had ever done. Only rely on the development of leisure travel cattle Travel Network has been listed in the United States this May, become following Ctrip, Art Dragon, where to go, the fourth listed in the Nasdaq China Online travel company.

China's online tourism market is quite like today's internet pattern, Ctrip, Art Dragon and where to control the trend of three points world, almost monopolized the online tourism market. Ctrip is China's first batch of internet companies, starting from hotel reservations, has developed into a ticket, hotel, car, tickets, tourism and the introduction of the comprehensive tourism platform; art Dragon by Ctrip step by step to retreat from the main hotel; After the investment in Baidu to be able to head-on confrontation with Ctrip, the equivalent level platform.

The way cattle and where to go the same time to create, is in the big three cracks in the company grew up. Compared to the other three of the volume, it is still a small company, according to the IPO price calculation, the market value of the bull market is Ctrip 1/20, is to where the market value of 1/7. In addition to the three major online tourism giants, donkey mother, the same way network, poor travel and other online tourism companies emerge, the passers-by are the group positioning in the tourism market in the innovative companies, the first to stand out.

In the stock market, the company's CFO Yang Jiahong always trembling. On the one hand, in the U.S. capital markets, there is no similar model with the pedestrian, it is difficult to apply the U.S. business model to impress investors, on the other hand, the bull has not been profitable. Its prospectus shows that in 2012-2013, the total net loss of cattle was 186.8 million yuan, 2013 net loss of 79.63 million yuan, gross margin of only 5%.

However, less than two months after the listing, the bull like a dark horse from the sky, its share price from the issue of 9 U.S. dollars to 18 U.S. dollars, the market value doubled. Today's Chinese Internet pattern is becoming a big monopoly of the world, how to venture under the shadow of the Giants, and in the fierce competition in the form of victory?

Rule one: Find the right position to do subtraction

If you want to give a successful summary of the experience of the cattle, the most important thing is to find the right positioning, accurate to a very fragmented market.

Udunder, founder and CEO of the Travel network, does not have a large corporate background, but has been staying in the Pioneer Network, blog China, childcare nets and other start-up companies. As early as he intended to create a pedestrian, Ctrip, and other art in the air tickets and hotel business has been easy to book online, but leisure tourism online booking almost a blank.

With the rise of the Internet, more and more people will search through the Internet and travel routes, query lines into the site is the earliest source of traffic. Udunder began to do a tour of leisure tourism introduction to the community and attractions, similar to today's Ma Honeycomb.

However, this model can not generate revenue, so the cattle transformation to do travel agencies booking platform. This is equivalent to a display platform for travel agents on line, taking commissions from products sold by travel agencies. As more travel agencies move their travel business online, their orders are growing fast.

In the shadow of the big company, Udunder chose Ctrip and did not cut into the business-leisure vacation travel. If the Ctrip is to provide the supplier of air tickets, hotels on the network platform sales, the passers-by to help the line under the travel agencies and supplier products packaging, integration and then through the network distribution, to earn the difference. In addition, Ctrip will make use of booking air tickets, hotel business advantages of the development of free line, and the main focus of the cattle on the trip with the group, so that the formation of the difference between the competition.

Until today, with group tour is still the main business of passers-by. The latest results show that in 2013, with the group tour, self-help tour of the revenue is 1.9 billion, 1.1 billion, respectively, accounting for 63% and 37% of the total revenue.

Fortunately, compared with hotel, air tickets, with the group tour is much more complicated, which needs to provide consumers with a huge choice: in different lines, round-trip time and the hotel's free combination will have a lot of segmentation opportunities. Nowadays, there are 200,000 kinds of tourism products for the cattle, but even so, they still think that they need to enrich their products to meet the diversified needs of consumers, and the choice of diversification has already built up a barrier to the competition of the Giants.

For example, the best selling product for a cow is the island tour of the Maldives, on line 1629 kinds of products; in the Maldives capital Male also set up the exclusive counters, passers-by and cattle visitors can directly at the airport at the pedestrian counters and enjoy the local pick-up service, and can be in the first 30 days of travel unconditional without a refund. By contrast, Ctrip's Maldives Island Tour is only 374 products, the island is not the choice of the cattle and meticulous; Where to take advantage of the open platform, access to 50 agents and 1195 Maldives tourist routes, but only access to products, there is no detailed selection of the island description.

Maldives has 1190 islands, of which 87 are "one island, one hotel" model developed into a resort hotel, tourists booking the main issue of tourist routes is to choose the island.

Passers-Ox has developed 62 Island Raiders for Tourism and has developed a dedicated island recommendation for snorkeling and wedding planning. Visitors can make the route according to the room type, on the island transport, overall budget and travel purposes (honeymoon, parent-child, snorkeling) to choose the island, and the island was graded, collected each island scenery photos, entertainment facilities, room type (specific to whether there is drinking water, network, snorkeling charges), Island Catering, Hotel Phone mailbox and user comments, satisfaction ratio and travel notes. If tourists need to book Maldives Island tours, compare several online travel websites, it is easy to see the detailed description of each island from the passers-by and choose the conditions, thus forming a closed-loop reservation.

In fact, there are other opportunities for the development of the cattle. As early as 2010, the COO Hai Feng found that ticket business was an internet opportunity, and began to try to do so, and the fast-growing ticket business was consistent with his original vision. But in the end, the net still narrows the ticket size--it means investing a lot of people. Similarly, Hai Feng has found that prepaid hotels will also have great business opportunities, but eventually did not choose to enter, he said: "We have always adhered to a point of view, to do subtraction, as little as possible, as we were at the beginning of the venture to focus on travel vacation, did not make hotel tickets." If you do more, there is no way to do it. ”

In the online tourism market in 2013, the annual turnover of tourism vacation business generated by Ctrip is about 23.3% of the total turnover in the online tourism market, ranked first, the travel net accounted for about 9.8%, second, and the second is the mother of Donkey and the same network. Unlike Ctrip, it is more focused on traveling with the group and outbound travel, which accounts for more than 70% of the business income of the passers-by, and Ctrip did not enter the overseas market in the early stage.

For the past few years, Udunder said:

"Most entrepreneurs want to do a good job and everything is done before they get into trouble." We have been restrained want to long desire, only do online travel, can not do air tickets, can not do business. ”

Rule two: Looking for the scale effect

Another big rule of competition with Giants is to make the niche market bigger. Online travel dealers are essentially the same as the retail industry, which is ultimately an industry that needs the scale effect: the more the Bulls can sell the suppliers, the stronger the bargaining power. If the scale of the cattle, can be promised to sell 1/3 of seats, suppliers will have the strength to charter, so the larger the size of resources and inventory Control the more powerful.

Whether it is the requirement of scale expansion or the demand of consumers for service, another important decision of Udunder is the establishment of the Offline Service center.

Setting up an offline service center is not a simple decision. For the booming tourism demand, it costs 1 million to rent a house on the ground to build a service center. However, the offline service center can also form rapid expansion, increase sales, market and other personnel to increase the supply of local suppliers. In the leisure tourism product mix, the user often needs to choose the origin, if can add some local suppliers, may expand the consumer population greatly.

On the other hand, it is also a good opportunity for the cattle to establish an offline service system. Outbound tour of the customer unit price is high, the two Maldives tour may cost 50,000 yuan, many people tend to go to the entity shop to do counseling to confirm that the passers-by is not a leather company. The European Bank, Japan, the United States and other countries also faced with the complex issue of visas, offline service centers make visas and counseling more convenient.

From 2009 to 2010, the offline service center has been expanded to Beijing, Shanghai, Nanjing, Hangzhou, Suzhou, Wuxi. As of the listing, the Hai Feng has owned 15 line branch, the company said: "This year should be able to 40 branches." ”

"The early words are more simple and rough, that is to see the population of GDP, where the rich where people go." Udunder the way the offline service center is described.

Another way to expand quickly is by branding advertising. Passers-Bull was the first Internet company to advertise at a subway station, while the way to occupy the two or three-line city was the advertisement of CCTV and local TV.

On the eve of the listing, the Kimi and Lin to sign the spokesman, Udunder said: "This to the next in the two or three-line city expansion to play a very big help, before we in the first-tier cities in the visibility is relatively high, but the number of two or three-line cities, the national media to promote the localization of the brand is a great help." ”

After the listing of cattle, the center of gravity is to expand to the two or three-line city. In addition to the most basic demographic and GDP considerations, Udunder will also decide which cities will expand based on background data. 2011-2012 years, Udunder's main job is to comb the internal process and improve internal efficiency. Now, in the background of cattle in transit, every day can see the current stage of order, subscription IP, conversion rate and a series of indicators. At the same time, Dunde will also analyze the differences between products and peers in the same city to choose the way of expansion, such as sales expectations, product richness, timely recognition rate, price competitiveness.

Traditional suppliers often do not want to be free when they purchase air tickets, because travel agents can often earn higher rebate fees when they buy things and eat abroad. But Hai Feng found that the free line increasingly became a consumer's travel trend, so they began to develop their own products, directly with the airlines and the hotel cooperation. Yang Jiahong said that in the first-tier cities, freedom has become a trend, and this group is gradually expanding.

In addition to the trend to develop a number of free line products, cattle are also in the full play to their own good aspects-this year, the focus of the market sinking to the two or three-line city continue to go deep with the group tour business, and is expected to join the two or three-line city crowd, the future with the number of

Rule three: Good service is the foundation

Service is also the formation and the major difference between the important link, because the quality of service and the size of the enterprise relationship is not small, but good service can be a great degree to retain customers, and corporate brand accumulation of word-of-mouth.

Tourism is a very non-standard product, the pedestrian cattle do not have the production capacity of tourism products, how to control the quality of service become a big problem.

With rapid expansion, more problems are revealed. In particular, consumer complaints began to become more, such as not directly provide products and guides, not to control the supplier's services, the hotel is not satisfied, flight delays and other changes in the itinerary.

Tourism products are divided into off-season and peak season, when suppliers are difficult to sell products in the off-season, it is hoped that the passers-by can help share sales pressure. A supplier and the airline signed a one-year agreement, a year package of 300 aircraft and 10,000 airline seats, if not sold will be very stressful, so hope that the passers-by to help distribute. However, if encountered in the peak season, the travel agents to the customers and not their customers, so also frequently appear consumer complaints.

Realize that the importance of good service is found in the complaints of tourists. 2008 is the most difficult year for the cattle network. At that time, the order of the cattle network gradually improved, and set up a small call center. Due to lack of funds, Udunder with open source system, bought some hardware, spent less than 100,000 saved a cottage call center. 10 Telephones on a table, customer service to pass each other, but because the system is not stable, often appear after the phone can not hear the voice or echo, causing consumers often suspect the authenticity of the site and do not dare to order. They want to solve the problem in a variety of ways, but they will never be able to solve the echo problem without substantially increasing costs.

At that time, the only development fund is Angel investment millions of yuan, until Udunder find the Gobi a round of investment, spend 1 million or 2 million to completely solve the problem of call center, the user experience has greatly increased, orders increased by more than 20%.

From 2011 onwards, Udunder focused on the process of carding and index system establishment, through the process of carding to improve internal efficiency, such as the 1000 yuan below the low customer unit price of all automation, to achieve mobile phone and PC wireless booking, to improve the productivity per capita; The index system is set up to provide better service to users.

An important link in the establishment of index system is the standard of abstract products. Hotels in Maldives, for example, often have mice and cockroaches, which require a variety of internal products to be graded by the cattle, below the two level can not be sold.

In order to resolve the differences between the tourists and suppliers, the passers-by also set up a set of physical electricity to build a comment system, if the rate of praise less than 75% of products, will be forced to the shelves. For product sales considerations, travel agencies are very important users of the comments, forcing travel agents have to improve quality. In addition, the company has set up a quality controller to enter the supplier's companies, according to customer complaints to change their products and services.

In order to form a competitive barrier that distinguishes itself from other giants, the bull built a 400-person product Advisory team, which allows users to call the travel routes and solve their travel problems anytime and anywhere, greatly improving the user experience. A proficient in national tourism routes of product consultants can also be based on the needs of consumers to design tourism products, and at any time to accept calls to consult, this is only to the group tour as a sideline of the three big giants for a little luxury. The formation of tourism service standards, which would like to travel outside the consumer to play a label, the pedestrian cattle leisure travel is the most focused.

Rule four: Dance with the Giants, capital-binding interests

The bull market is a major positive news is Ctrip's shares.

In the history of the development of cattle nets in transit, no products have been connected to Ctrip. Two of the cooperative attitude can be seen in the fierce competition, the two sides have always been wary of each other.

On the eve of the IPO, Yang Jiahong found that almost all investors would ask about the competition with Ctrip. Investors have always been worried about the flow of the entrance of Ctrip if the force to travel online, how to deal with the cow. In other words, the listing of passers-by need Ctrip's shares to increase investor confidence.

For the portable said, if the way cattle listed financing rapid growth, also become ctrip in the market segments of the hidden dangers, investment in a listed company for Ctrip is also conducive to harmless. Moreover, online travel companies have to compete for market prices to pull down their gross profit margins, and the family has become increasingly tired of this vicious competition.

Both the side and the Ctrip are also throwing olive branches. On the eve of the New York Road Show, Hai Feng received a message that Ctrip is interested in cooperating with the passers-by. Udunder and Yang Jiahong met with Liang Jianzhang in a hotel in Hong Kong and made two conventions: first, the two sides will not fight the price war, and the two sides should consider seeking more cooperation on resources.

After the stake, Ctrip will be the exclusive hotel access to the cow, while the passers-by will also help Ctrip to sell products to ease their inventory pressure. This means that Ctrip has become one of the suppliers of passers-by.

Two weeks before the listing, Ctrip announced the subscription of 15 million U.S. dollars in the stock and won a seat on the board of the passers-cattle. It is not hard to find that the amount of 15 million dollars is not big, symbolic meaning is greater than the meaning of integration.

Backed by the tree stood still camp, both sides can end the unnecessary price war, concentrate on the development of their business. Listing is an important starting point for the expansion and development of the new business, but it still needs to face huge losses and low gross profit margins. Earnings showed that the ox interest rate was once low to 4%, and a halt to the price war and expansion of the scale may have improved the gross margin. Udunder said that the next major work is to enter the two or three-line city and how to revolve around leisure tourism product innovation, such as the introduction of cattle like the only products will be "tail goods discount"; Udunder found that the Internet at their own expense is very high, launched 20-day unlimited flow of the Internet hardware products.

The development of the cow, you will find that it has always lived in the line tourism under the pressure of three mountains, but has been around the core of leisure tourism, and the Giants are not good at doing with the regiment swim to the extreme. This extreme to some extent to help the bull in the fierce competition to survive, but also restricts its business horizontal innovation to make it a relatively small company. If you want to ask what regrets after the listing, Hai Feng said: "Take more money, the scale bigger." "(from" commercial value ", the network exclusive first Titanium media)