China’s travel site Tuniu on the road to expansion after major funding deal
China’s leading travel website Tuniu Corp plans to use its latest US$800 million in funding to expand service centres, pursue a partnership with e-commerce firm JD.com and expand into new businesses such as travel finance, its top executives said.
Yu Dunde, Tuniu's CEO and Yan Haifeng, COO and newly promoted president, told reporters late in Beijing on Monday that the money, from investors including JD.com and venture capital firm Sequoia Capital, would help boost the company’s appeal to customers.
“Customers’ experience is core to us. We haven’t invested heavily in the human capital of customer service, but we aim expand our 75 offline service centres to 1,000 in the next three years in China,” said Yu.
Founded in 2006 in the eastern city of Nanjing, Tuniu has focused on online vacation travel services.
Unlike other Chinese travel sites Ctrip and Qunar, which mainly sell flight tickets and hotels to business travellers, Tuniu sells group and individual package tours. It runs the most Chinese tours to the Maldives. One in four Chinese visitors to the Indian Ocean country went through Tuniu.
After the investment, JD.com will become Tuniu’s largest shareholder with a 27.5 per cent stake and a seat on the board. The partnership will allow Tuniu to sell its products on JD.com’s platform, and Tuniu will also set up a team to help run JD.com’s existing travel channel.
“JD.com is a much larger network and with more customers. By using their platform it will help us grow. Tuniu has better experience in travel services and can be helpful to JD.com. It’s a win-win for both sides,” Yu told the South China Morning Post.
JD.com had around 100 million active users last year and posted a 62 per cent rise in revenue in the first quarter of 2015 from a year earlier, while its net loss for the period shrank by 87 per cent to 710 million yuan (US$114 million)
Tuniu’s planned travel finance service will allow customers to pay for their tours by instalments. The company is also aiming at the growing numbers of domestic travellers. Currently 65 per cent of its users travel overseas.
“We found that more and more families from second- and third-tier Chinese cities are starting to travel, and they have enough purchasing power. We want to help them with the best travel experience,” said Yu.