A new analysis by Phocuswright Research seems to suggest to anyone genuinely interested in marketing their travel product or their destination to China—now the world’s largest source of outbound international travel—that the use of mobile app tools is a must. The latest numbers show that the share of online gross bookings made via mobile devices is growing rapidly worldwide. As such, it is critical for travel sellers of all stripes to understand where their audience prefers to book and how that preference is evolving. While the USA and most countries in Europe are experiencing promising growth in Mobile Booking Penetration (MBP), China is setting its own mark that is far beyond the world standard.
(Note: The Phocuswright analysis was released shortly after a new study sponsored by Jing Travel, which says that 95 percent of China‘s internet users use mobile to connect online, spending 2¼ hours every day on their phones—a total that equals, for the first time, for the amount of time they spend watching television.).
The Phocuswright analysis notes that China had already achieved 40 percent mobile booking penetration MBP by 2015. It now stands at 59 percent and is expected to climb to 77 percent by 2020, far outpacing the rest of the world. At the same time, the United States, which is far behind China at 22 percent MBP is expected to reach 30 percent by 2020; this will place the U.S. ahead of only France among key developed countries, and it will comprise less than half of China’s expected MBP.
What accounts for China’s lead in MBP is the size of its population (1.4 billion), which generates large user numbers regardless of share: China now hosts over 1 billion mobile subscribers, the majority of them on smartphones. In India (it also has a large population, with about 1.34 billion and a correspondingly large population of mobile subscribers), the majority of consumers only have access to basic mobile devices, which contributes to a relatively low MBP, explains Phocuswright.
One explanation for the high MBP is that Chinese online users never had much of a chance to use desktops, PCs or laptops. This is because broadband Internet and affordable PCs arrived relatively late in China, many Chinese never owned a desktop or laptop computer; the smartphone was their first device, making them “smartphone natives” who are much more likely to embrace mobile e-commerce. This environment fostered the popularity of WeChat, the world’s most advanced mobile messaging and commerce platform, which many Chinese use for daily tasks including messaging, making utility payments and ordering food delivery.
While the share of travel bookings taking place within WeChat is relatively small, the ubiquity and widespread use of WeChat Wallet and Alibaba’s Alipay are helping Chinese travelers become much more comfortable making large purchases on their phones than the rest of the world. In addition, Chinese OTAs Ctrip, eLong and Qunar have successfully enticed travelers to book on mobile with deep discounts and a smooth booking experience. (According to yet another recent study, from the Amadeus IT Group, the top three travel apps used by Chinese travelers are from Ctrip WeChat and Tuniu.)
As far as travelers from other key Asian markets are concerned:
—MBP in Japan is driven by Rakuten, which generated more than half of its overall online retail sales (not just travel) via mobile in 2016.
—In India, MBP is being galvanized in part by the popularity of mobile wallet solutions such as Paytm.
Meanwhile, travelers in the U.S.—says Phocuswright— are hanging on to their ingrained habit of booking on desktop or laptop (or through a call center, for that matter).
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