ELong says Internet sales and marketing key for growth
By Liu Baijia (China Daily)Updated: 2006-12-12 08:59
China's second-largest online travel service provider, eLong Inc, is focusing on its Internet sales and marketing in order to compete with market leader Ctrip.com International Ltd, executives at the firm told China Daily.
The NASDAQ-listed Chinese firm said it is working closely with US-based giant Expedia, which holds more than half of eLong's shares, to boost the number of transactions made on its website. This, eLong said, will help it reduce the costs of running its 800-person call centre.
In the United States, 30 per cent of users of online services book hotels and rooms on the Web, but in China, only 5 per cent do so. Both eLong and Ctrip need to employ hundreds of operators at call centres to handle orders or answer inquiries, which pushes up costs.
"Internationalization should be the one thing that differentiates us from anyone else in this market," said Richard Xu, chief marketing officer of eLong.
ELong, unlike its rival Ctrip, allows English-language users to book international flights online, rather than having to call.
While Ctrip focuses on high profit margin services such as package tours and business travellers, eLong hopes to take advantage of the Internet to serve a large volume of customers at a small cost, the firm said.
The Beijing-based firm just made it into the black for the first time in seven years in the second quarter, but its profitability was still small.
In the third quarter, its operating income was just 1.7 million yuan (US$215,000) on revenues of 74.60 million yuan (US$9.4 million). Its rival, Shanghai-based Ctrip, had operating income of 64 million yuan (US$8 million) in the same period on revenues of 208 million yuan (US$26 million).
At the end of November, the company revamped its website to make services easier to access for users, along with allowing them to ask questions on the website so they do not have to call.
It also decided to give online customers reward points worth 200 yuan (US$26) to 300 yuan (US$38) per order to encourage travellers to use the Internet rather than the phone.
In May, both eLong and Ctrip launched 360-degree room view services in China, where users are able to see hotel rooms before making bookings.
Besides utilizing the Internet platform, eLong's other goal is to expand its
customer base through marketing.
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