Chinese travel site eyes sales increase to $160M in 2013

Baidu-backed Qunar.com is targeting 1 billion yuan in sales this year, buoyed by the rise of bookings through its mobile app and growing domestic online travel booking market.
Written by Liau Yun Qing, Contributor

Online travel booking site Qunar.com hopes to double its sales in 2013 to about 1 billion yuan (US$160 million) on the back of more online and mobile bookings.

In a Bloomberg report Monday, Qunar CEO Zhuang Chenchao said he believes the company will see 20 percent of bookings from mobile devices, up from less than 15 percent in 2012. Qunar's mobile app saw more than 25 million downloads by the end of 2012.

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Qunar CEO believes the Chinese online travel market has great potential since only about 15 percent of bookings are made online.

Zhuang said the Chinese online travel market has potential as only about 15 percent of current travel bookings are made online, whether through PCs or mobile devices.

He added that Qunar expects hotel-related sales to contribute 40 percent of its revenue this year, up about 10 percentage points from last year. Most of the rest will come from airline ticket bookings, he noted.

Baidu owns the controlling stake in Qunar after it invested US$306 million in the company in June 2011. 

Tech as differentiator
According to Zhuang, the company's online booking strategy helped it lower its fares, allowing it to overtake Ctrip.com International to become China's largest online air ticket booking company. He added the site has a 40 percent profit margin in the airline ticket business as the use of technology helps reduces staffing costs.

Bloomberg reported that Qunar competitor Ctrip.com relies more on call-center bookings than Qunar. Ctrip announced on January 25, 2013, that it will let go of 500 offline sales staff to cut cost and overhaul its operations.

In an earlier ZDNet report, industry players said travel companies in the region have boosted their mobile offerings to cater to the region's growing smartphone population.

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