Study reinforces China as great untapped market
The Chinese online travel market will see slowed but continued growth in 2009 according to PhoCusWright’s Asia Pacific Online Travel Overview.
“China’s position as a powerful emerging economy and home to 1.3 billion people with increasing access to wealth has made it a dynamic backdrop for travel growth and innovation,” the site says.
Online travel penetration in China will increase to 14 percent in 2009, up from 11 percent and will continue to grow in 2010.
The site also says the total Chinese travel market, however, will contract in 2009, only slightly outperforming the total Asia Pacific region which is projected to shrink by 6 percent.
”China, is one of the world’s great untapped markets,” the study concludes.
Sheer market size paired with increased wealth and consumerism is what started the original travel boom in China.
Internet penetration in China is only 18 percent and yet, even at this low rate, there are more Internet users in China than in the US.
”This, combined with China’s skew toward intermediaries (63%, vs. 36% supplier direct in 2008), means there are billions of dollars to be made online,” the site says.
But there are also problems in China.
Lack of standardized distribution and difficulty scaling operations are just a few of the hurdles that face those eager to tap into a market that is still subject to substantial regulation, the site says.
Ultimately, the market is dominated by a few private companies that have developed recognized consumer brands, customized technology solutions and the scale to reach a broad audience.
By David Wilkening
David
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