China’s Biggest Travel Search Site Qunar Considers U.S. IPO

Qunar Inc., China’s biggest travel search site with 42% share of traffic, is considering to have an initial public offering (IPO) in the U.S. stock market as soon as the market stabilizes. The site offers flight and hotel booking information not limited to specific vendors, and allows searchers to make reservations directly with airlines, hotels and other travel services. CEO CC Zhuang (Bloomberg)

According to recent report from the Boston Consulting Group, China’s travel industry revenue is expected to increase 14% annually to 5.5 trillion yuan (U$ 871 billion) in 2020 from 1.5 trillion yuan in 2010. As such, Qunar (which means “Where do you want to go?” in Chinese)  expects to double its sales figure to a few hundred million yuan.

Founded seven years ago, the so-called Kayak of China that provides information on flight tickets, hotels, packages, and visas reached break-even point in 2010 and was acquired by search giant Baidu for US$ 306 million in June 2011. With 80% of revenue coming from pay-per-click ads and 15% from display ads, Qunar aggregates tons of consumer reviews to help members in making decisions before travelling. The site has since launched the country’s first mobile travel information apps — with Android, iOS and Symbian variants — which have attracted more than seven million users. The mobile app provides up-to-the-minute flight and train timetables and flags out nearby tourist attractions.

Best Chinese Travel App

In 2011, the iTunes Rewind list released by Apple, which highlights the best and most popular content in the App Store, awarded Qunar’s iOS app as the Best Chinese Travel App. “We aim to provide a one-stop shop for travelers,” said Larry Chen, Qunar Vice President for Mobile Business as told to CNN.

In China, travel booked via internet comprises about 7% of the country’s tourism market and the ratio is expected to surge to 30 percent in the next five years, quite similar to current levels in western countries, explains Chenchao Zhuang, Qunar co-founder and CEO. At present around 35-50% of travelers in the U.S. book their trips online. But, with Internet users in China surpassing 500 million this year, and with 13 billion mobile phone apps downloaded in the same year, Qunar is optimistic that the company will attain higher online booking rates.

Zhuang added that Qunar has yet to use the cash from Baidu’s investment. The company wants to have enough cash on hand to tap opportunities as they come. Right now, this is in the form of tremendous growth potential in mobile applications.