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[Media Focus] “QZYtrip” Finishes Its 20 Million Yuan Pre-A Round Financing ——A Report on 36Kr about

Date: 2016-01-29
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Note: recently, TTGG-Dage Angel Fund concluded its first investment and successfully became the lead-investor of “QZYtrip”. Y.Z. Capital and other institutions became co-investors.       It seems opening up virgin soil in destination markets and running online B2C platforms for fragmented product booking haven’t developed as well as people imagined in recent years. On the one hand, supply chain hasn’t been polished enough, there’s the lack of product superiority and services. On the other hand, online traffic is expensive, and users bought with money have no constancy. The business-side and user-side make a “chicken and egg” problem in nature. Without sustained online traffic, the business side cannot get good resources. How can resources without a price advantage attract users?       In this dilemma, pure internet companies should have passed many pits. It’s no exception for large platforms like Ctrip. Then if an online platform doesn’t have enough experience or capital support to get out, will it succeed to have local travel agencies put the destination market online, i.e. to have offline resource companies explore downstream? What kind of idea will it be?       At present, “QZYtrip” is an example. Depending on its wholesaler background and local travel agency resources, it defines itself as a “one-stop platform for a selected travel life at destinations”, with fragmented travel products in Australia and New Zealand as featured products. Its mobile products were launched online in Oct. 2015. Now there have been an iOS version and an Android version.  36Kr learnt from an exclusive source that QZYtrip has finished its 20 million Yuan Pre-A Round Financing, TTGG-Dage Angel Fund (the Fund was co-initiated by TTGG and Dage Capital; TTGG is one of the earliest PE investment institutions in China. Its controlling shareholder GGTT (833044) was listed on NEEQ on July 30, 2015. By the end of Sept. 2015, TTGG held 185 funds, and the assets it managed exceeded 22.1 billion Yuan. QZYtrip was its first project after it returned to the VC field) as the lead investor, Y.Z. Capital and other institutions as co-investors. What is the investment logic of TTGG?       In TTGG’s view, an online travel agency’s kernel rests with resources (whether it has good products and prices or not), channels (whether it can win tourists at low costs or not) and services (whether it has a closed loop of offline consumption). Furthermore, institutional investors pay more attention to its resources, products, technologies, services, channels, brand and profit model. As a result, 36Kr interviewed QZYtrip’s founder LI Li and disassembled its products one by one. TTGG’s investment logic thus became clear gradually. Hold the Ability to Acquire Resources with a Price Advantage       Before founding QZYtrip with his team, LI Li also founded Scenery Travel Service, which is a famous wholesaler of Australia and New Zealand traveling routes in the industry. LI Li told 36Kr that in 2015, among the 200,000 Chinese tourists traveling to Australia through package tours in one year, 19,000 tourists were received by Scenery Travel Service, accounting for 8%-9% of the package tours and he hoped in the future through some merger integration Scenery Travel Service could increase its market share to 20%.       In fact, Scenery Travel Service adopts the B2B model. In comparison with QZYtrip, the former applies the wholesale logic, while the latter applies the retail logic. There are distinctions between the two in terms of product and user. But in terms of resource, in virtue of Scenery Travel Service’s cooperative resources accumulated over the decade in the destinations, QZYtrip also can get relatively low wholesale prices. In addition, apart from Scenery Travel Service, as LI Li mentioned he personally has local travel agencies in Australia. The overall annual sales volume is about 25 million AUD. In 2015, more than 30,000 tourists were received by the local travel agencies. He also has a vehicle business with 27 buses and business purpose vehicles. Next, all these resources will be connected to QZYtrip.       Control Featured Products by Itself, Do “Subtraction” through Handpicking       In the process of packaging resources into products, Scenery Travel Service’s screening criterion in the past was the products must be simple and easy to sell, price-oriented. But today’s QZYtrip will combine products according to some user data in the self-service travel market, and gradually classify products by theme, hobby and interest. It’s “specialized and standard”. (QZYtrip will introduce talents to provide services during trips, and this category will be linked to talent labels.)     At present, QZYtrip has many products. But as LI Li said, their goal is to make a selection of products for each city. The number of items in each category like sightseeing, food and recreation won’t exceed 20. In the future, QZYtrip will do the subtraction slowly. In addition, QZYtrip will sell popular products itself. For example, if a scenic spot is visited by 80 self-service tour users in 100, QZYtrip will package it to sell by direct sourcing; as so some personalized and localized products, QZYtrip will outsource to 3rd-party API.    When self-service tour users gradually tend to book products during trips, how to satisfy users’ immediate consumption in real time is also a problem to platforms. According to LI Li, QZYtrip will satisfy real-time consumption in two ways. First, it can adopt a conventional way and take some inventory from suppliers in advance, particularly best-selling products and products that consumers can compare prices easily. The commission of this way is higher. Second, it can link to intermediate channels like GDS, but the commission of this way is lower. Solve FAQ before Departure by Customer Service, Lower Users’ “Mental Threshold” during Trips by Talents The threshold of outbound self-service travel is still high to common people. QZYtrip’s customer service mainly plays its roles before departure, solving some FAQ and learning user preference to recommend products. But during trips, customer service staff without local experience cannot help. Thus QZYtrip wants to provide services during trips in an online talent mode. According to LI Li, some talents are skillful in a certain aspect, such as shopping, sea angling, etc, so QZYtrip will match corresponding talents according to each user’s demands. According to LI Li’s investigation, self-service tour users in fact need a kind of mental guarantee more, for example, to make sure their routes are correct, to cope with some emergencies. The mental demand is bigger than the actual demand. In other words, most users don’t need a talent to accompany them to travel offline (the cost is also very high).     But answering questions online also has a time cost. Thus users need to pay talents for the service. This function is expected to be launched online in June this year. It will be built in QZYtrip APP. This is also one of the edges of QZYtrip in comparison with platforms like Haiwan, Hitour, Woqu.   Win Tourists at Low Costs by Precise Offline Guiding   How to win tourists has always been a problem to low frequency scenic spots. To win tourists at a low cost is to have an edge. QZYtrip’s mode is to grasp offline targeted traffic. At present, it gains tourists via visa and airline.    According to LI Li, there are six travel agencies in China qualified for Australian visa issuance, and one of them is in his hand. There are stores on Alitrip that have many visa deals. In fact it could be them that issue visas behind the scenes. They hold the visa data of nearly 100,000 people each year. The traffic is being channeled to QZYtrip slowly. The current usual downloading users are channeled via visa. In terms of air ticket, QZYtrip can share data with large airlines. In addition, QZYtrip is planning to conduct a round of promotion hand in hand with Air New Zealand and Qantas Airways in Feb. this year, to guide users download QZYtrip APP via counter ad, onboard WiFi ad, “One Yuan Airport Shuttle’, etc. To QZYtrip which possesses its own vehicle resources, the cost of airport shuttle service each time may be about only several hundred Yuan. QZYtrip wants to make overseas GetYourGuide its benchmark. The latter develops independently, while working with other platforms in guiding the traffic. In LI Li’s view, QZYtrip won’t be isolated either in the future. It also will work with platforms that have front entrances (air tickets, hotels, visa service, tips, etc) and stakeholders on the chain to grow bigger. Thus QZYtrip products will be sold on other platforms. Its executive capacity and product advantage will help them build their brands.     Tourist Shopping as a Future Pillar for Making Profits, Explore to Make Travel a Lifestyle QZYtrip makes profits via price differences formed between consumer prices and cash-back prices (5%-10%) for users. LI Li told 36Kr some products could realize a gross profit rate about 20%-30%. It’s worth noting that the proportion of tourist shopping in outbound consumption is over 40%, but so far there hasn’t been a benchmark product to develop this field. 36Kr has reported on FINDIEA and Jessica’s Secret. QZYtrip also will exert its efforts to develop overseas shopping markets. In Sydney, Australia, QZYtrip has worked with more than 200 shops, including duty-free shops and brand shops. It can get a 5% rebate on average, part of which will be given to users. In online transactions, QZYtrip has introduced Alipay and WeChat Pay. At present, the two payment platforms are also developing overseas markets. In Australian market, QZYtrip is an important partner to them. Thus beside rebates from shops, QZYtrip also can get extra dividends from payment platforms. As LI Li mentioned, in Australian self-service travel market, pure FIT (free independent travel for sightseeing) only accounts for less than 20%, and more is for VFR (visiting friends or relatives). These tourists stay a longer time in the destinations. They need more localized products. Thus, apart from products like scenic spots and one-day tours, QZYtrip also will explore to “Make Travel a Lifestyle” and add items oriented to local living consumption.       About Destination Expansion, QZYtrip Adheres to “Four Dimensions”      Australia and New Zealand are the markets that LI Li and his team are best in. As to how to develop in other countries, LI Li said he didn’t have a ready expansion plan yet. But he summed up “Four Dimensions” as QZYtrip’s development logic:    1. The destinations must be far away, i.e. long-distance travel only, such as Australia, New Zealand, Europe, America and other countries, which means the users are more valued;      2. The destinations must be different from China in language and culture to have the scene to reflect the value of QZYtrip;   3. The destinations must be countries where service value is high. In other words, only when human cost is high, will users rely more on products and technologies, instead of services provided by human;     4. The destinations must have complete business rules, because QZYtrip needs cash-back to maintain user loyalty. This requires shops on the business side to have the “contract spirit”. A negative example is when a user visits a shop via the APP, if the shop owner wants to make some quick money and asks the user to pay offline with a direct discount and thus cancel the online order, the platform’s interests will be harmed.     In QZYtrip’s core team, LI Li is CEO. COO CHI Wenfeng once was a senior journalist and investor. He worked for Netease, Nanfang Media Group and foreign-funded investment banks in succession before. Cofounder WENG Xiaodong once was a senior management member of Zhejiang GGTT Industrial Investment Management Co., Ltd. He focused on investment field and operated Moment Cam before. CPO DENG Taihua was the earliest Australia travel product specialist to explore the Asian market. CTO PAN Tianming works in Shanghai Advanced Research Institute, China Academy of Sciences, and IBM concurrently, with 12 years of experience in background development. CMO PAN Jin once was Marketing Manager in China for Club Med and Air New Zealand. She successfully promoted foreign brands in China.   TTGG-Dage Angel Fund’s investment in QZYtrip this time indicates the completion of its first investment and its successful layout in online travel platform field. In the future, this Fund will continue to pay attention to medical and health service, internet, culture and creative industry, etc, to support the sound development of innovative startup companies.    (From: 36Kr; Date: Jan. 26, 2016; by XIAO Yu; link: http://36kr.com/p/5042730.html)

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