Mainland site plans US listing to raise profile
Qunar.com, a mainland online travel information provider, plans to list in the United States next year to raise funds for future acquisitions and raise its profile among the mainland's growing numbers of leisure travellers.
Chief executive Zhuang Chenchao said preparations for the initial public offering were going smoothly, but the firm was not in a hurry to begin the listing process after several mainland stocks plunged amid market volatility after their Nasdaq debuts this year.
'The primary aim for us to seek a listing is to boost our brand exposure and get more people to know about us. We do not care too much about how much money we can raise,' said Zhuang, who declined to disclose further details about the offering.
China is set to overtake Japan in the next two years as the second-largest travel market, with a 14 per cent share of the global market, according to a recent study by the Boston Consulting Group.
Online booking of air tickets and hotels has become a leading option for growing numbers of Chinese travellers seeking the best deals and convenience, the study said.
Qunar, which means 'where to go' in Mandarin, is a search engine designed to help travellers compare air ticket and hotel room prices, and to provide other travel-related information. Users are able to access travel products provided by airlines, hotels and travel agents, and choose the best deals for themselves.
Unlike its major rivals Ctrip and elong, both Nasdaq-listed mainland firms, Qunar does not charge a commission, but makes money on costs-per-click and display advertising. 'We are not a seller but an assistant to travellers. That's why our offers are often cheaper and more attractive than other competitors,' Zhuang said. In 2005, Zhuang set up Qunar with two partners in Beijing after they found that travel-related information was the most sought after content online, and that offers on several leading travel sites were often not the best bargains.
The website has seen its number of core users jump by 70 per cent annually in the past few years. The company said it has been profitable this year as turnover had doubled from the previous year.
A survey by mainland consulting firm iResearch showed that the number of visits to Qunar.com reached 51 million in August, beating all mainland travel sites. Ctrip drew 36 million visits during the same period, iResearch said.
In June, Baidu.com said it would invest US$306 million in Qunar, making it Qunar's largest shareholder. Qunar had previously received financing from various Silicon Valley venture capital firms.
Zhuang said the strong growth in users would continue over the next few years, as the leisure travel market was booming on the mainland.
'Unlike business travellers, people who spend their own money to plan leisure trips are more willing to spend some time online to look for bargains. They are the users we target,' he said.
In the US and Britain, leisure travel accounts for 80 per cent of the total travel market, compared with just 20 per cent on the mainland, suggesting a strong growth potential, Zhuang said. 'A boom in leisure travel and the growing popularity of online travel booking for hotels and air tickets are the two big trends on the mainland travel market in the foreseeable future,' he said.