ZUJI

Finding a Winning Strategy

GROUP 1
CONTENTS
Introduction

Industry Overview

Company Profile

Strategic Options

Recommendation
01 Introduction
 Introduction

ONLINE SEARCH

TRAVEL How to become the DISCOVER

“Google” of Travel?
AGENT SHARE
02 Industry Overview
 Hong Kong Travel Market

US$ Per capita income of

41,076 152 HK visa-free access destinations
HK residents

7.24 Online share of sales, lower than

HK population-customer base 10%
25% level in Asia-Pacific region.
Mil
US$
12BIl

OTA was anticipated to surge to

US$ Market size of HK
12Bil
40% 40% market share in two year –
travel-intermediaries
great potential!
 5 Forces

High Threats of
Moderate
• Traditional Tour Operators New Entrants • New comers like Hotwire
• Other OTAs • Mobile apps

Moderate
High
Bargaining Bargaining • Customers keep
Competitive
• Withdraw from OTA Power of Power of searching deals online,
• Direct websites Rivalry but will finally go to offline
Suppliers Buyers
• Rate parity travel agent to book.
• Membership system
• “pay at booking”

High
Threat of
Substitutes • Search engines, especially Google
• Meta-search travel websites
• Social media apps
• Online group buying
• Ecommerce website

Source: 5 Forces Porter

03 Company Profile
 Singapore Zuji
Zuji.com
&Australia Hong Kong

Alliance with Further into New

Yahoo China Ownership

Trip Saver Search, Discover

Webjet
Technology & Share
 VRIO

Valuable Rareness Imitable Organized

Technology
Superiority

Strategic
Partnerships

Local
Knowledge
 Competitive Advantages

Proprietary technology that

Technology allows customers to

personalize bookings

Strategic Partnerships
Extensive Partnerships with
100+ Airlines and 1000+ Hotels

Local knowledge of Hong Kong

Local Knowledge
to capture the heart of the
Hong Kong people
04 Strategic Options
 Value Curve
Objective:
• Market Leader

Key Parameters:
• Conversion Rate (CRV) = No. of
Transactions / Customer Traffic
• Average Transaction Value
(ATV) = Total Sales Value / No. of
Transactions

Trend:
• The surge in data-enabled
smartphone usage
• The rise of millennial travelers

Source: Desk Research

 Blue Ocean
Search, Discover and Share

Eliminate Create
• Redundant packages • Interactive and informative mobile platform
(Big Data Analysis) for customer’s lifetime value
• Authentic and intimate local peer travel
Four and lifestyle advice and rating
• Customized packages

Reduce
Actions Raise
• Offline labor cost • E-commerce security
(e.g. hotline) • Local knowledge and precision marketing
• Undifferentiated marketing • Instant confirmation
• User friendly design
• One-stop online services
• Pay-per-click ads
• Travel partner network
Platform Ecosystem
 Network Effect

More Demand

Better
Price

Better
Quality More Feedback
and Data

More
Partners

Better Algorithm
 Innovation

Plan to grow market share or profits through product and service innovation.

Why innovate? What to innovate?

• Critical component in formulating business • Technology
strategy • Business models
• Redefine the marketplace in their favour
and achieve a competitive advantage Innovation
Strategy
What is the benefits of innovation? What is the scope of innovation?
• First mover advantages • Start with a radical innovation to create
• Net work effects a temporary competitive advantage
• lock-in key suppliers as well as customers • Sustain through follow-up incremental
innovations
 Innovation

Big Data Analytics

• To improve the customer experience by analyzing user preference, micro moments and
trip data
• To predict future demand and to personalize recommendations with greater accuracy

Technological Innovations
• Offer booking services and agents support on social networking applications, such as
Skype and WeChat
• More mobile functionality than on the webpages

Agency + Direct-to-Consumer Business Model

• Buys as a wholesale with long lead time to achieve low-cost and guaranteed inventory
for customers
• Offer loyalty rewards to customers and their family and friends to counter hotel chain’s
and airlines loyal programs and to attract and obtain valuable customer data
 New Direction

• Secure and fast payment backed

by Google and Alipay
• Technology updates performed by
payment partners
• Leverage the brand value of
partners such as Google and Apple

Strategic Tech
Ease of Transactions Emerging Tech
Partnerships

• Strategic Partnership with • Tech partners transition to VR

google and Apple to access and bot
3D Map Technology • Bots communicate with
 Travel Customization customers for personal
 Realistic overview touch (Compete with B&M
• Travel Bookings stores)
• VR provides real and
interactive experiences
 VRIO With New Strategy

Valuable Rareness Imitable Organized

Technology
Superiority

Strategic
Partnerships

Local
Knowledge

User
Experience
05 Recommendation
 Recommendation
Technology, in combination with other resources and capabilities,
can realize sustainable competitive advantages
THANK YOU