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The market concentration of China’s online flight booking in 2017Q1
According to the data in 2017 Q1 Quarterly Monitoring Report on China’s Market of Online Flight Booking issued by Analysys, the transaction scale of China's online flight booking reached RMB 132 billion, representing a year-on-year growth of 31.8% and a quarter-on-quarter growth of 2.3%.
  • 19 Jul, 2017
  • Travel
  • 374

According to the data in 2017 Q1 Quarterly Monitoring Report on China’s Market of Online Flight Booking issued by Analysys, the transaction scale of China's online flight booking reached RMB 132 billion, representing a year-on-year growth of 31.8% and a quarter-on-quarter growth of 2.3%. According to Analysys, the transaction scale of the said market has risen up compared with last quarter. As one of the largest online tourism sections, China’s online flight booking market has become relatively mature, and the year-on-year growth has shown a dramatic decline this quarter.

Aiming to increase corporate profits and achieve market domination, the airlines have accelerated the pace to construct direct sales channels and cooperated with OTA to reorganize the flight ticket agency industry after the formal implementation of the new regulations on ticket booking agency in July 2016, which adjusted the ticket sales policy to payment for flight segments. This quarter, the airlines have further strengthened the standard examination of the qualification of platform agents and sales control, requested the online platforms to knock out the foreign agents for domestic and international air tickets one after another, entered into agreements with fight ticket agents who will only sell the passenger tickets of the respective entrusting parties in their own channels, and sold flight tickets as a bundle with hotel services, scenic spot tickets, and other tourism products so as to improve their market shares.

With the intensified competition between the airlines, OTA’s profit space will be gradually squeezed. This quarter, OTA has focused on the international flight ticket market with high per ticket sales while further improving product experience and operating efficiency. The companies have provided more competitive online air service products through the deep integration of low-cost travel, IT services, e-commerce, product combination, technical docking, business structure, etc. and the renewal and upgrading of air ticket sales, freight search and display, platform supplier management, etc. On the other hand, the companies have further enhanced the supply of international air ticket products and services and provided the users with special tickets for international routes by means of international airlines and flagship stores, official strategic cooperation with popular overseas tourist destinations, advantageous platforms for price comparison and the like.  

 

In the first quarter of 2017, the total market shares of online flight booking market, including Qunar, Ctrip and Fliggy reached 73.6%, showing the further market concentration. Among them, the transaction scale of Ctrip equates to RMB 50.20 billion, representing a 38.0% market share; the transaction scale of Qunar equates to RMB 27.69 billion, representing a 21.0% market share; and the transaction scale of Figgy equates to RMB 19.22 billion, representing a 14.6% market share.

According to Analysys, the space of online flight booking market remains huge, and the demand of tourists for air travel will further grow thanks to the absolutely favorable prospect of the whole tourism market.In despite of the growth in the direct sales of online tickets by the airlines, consumers still reply upon OTA for online flight booking. The airlines will focus on the innovation in business models, and the improvement in online direct-sales services and user stickiness. OTA will set about big data collection and application about internet technology and marketing, supply chain management, and delivery of customer services so as to further tap the potentials of the customers, provide additional quality services, integrate the tickets and other tourism products, and optimize user experience and improve the retention rate.

For more information about the online tourism market, please keep an eye on Analysys's official WeChat account or call at 4006-515-715 for customer services. 

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