Yaochufa, a Guangzhou-based short-haul travel platform, announced it received RMB 550 million (USD 85 million) in Series D financing in late April.
Founded in August 2011, Yaochufa targets the weekend travel market and provides short-haul online travel products for customers, like a weekend trip from Beijing to the Great Wall.
AllChinaTech spoke with Ding Genfang, founder and CEO of Yaochufa, a company name that means “ready to travel” in English, to get his insights on founding a company and the online travel market in China.
“Overall, the funding will help us develop more weekend travel products and build an ecological chain for short-haul travel,” Ding told AllChinaTech.
In detail Ding explained that this round of financing will be used for two specific aspects: “We will set up our own hotel management company and scenic hosting company to reinforce our advantage in travel infrastructure, and we plan to cooperate with Kingding Investment, an investment institution based in the southeastern city of Quanzhou, to establish a fund for urban leisure products.”
“What we want to do in the future is not just tourism but ‘tourism plus life’. For example, we held a parent-child marathon in Guilin last month. More than 400 families participated. The participants not only enjoyed the scenery but also got to exercise together. The travel market will uncover more of these types of travel categories in the future,” he said.
Some people think the platform is facing fierce competition from other short-haul travel platforms, especially from giants such as Qunar and Ctrip. “In fact, there are many competitive online travel platforms in China today; however, good travel products and services are still inadequate,” Ding said. One can occupy many market segments if they have the best travel offerings. Yaochufa hopes to provide good travel products and services for other platforms.
Currently, travel sites usually provide massive subsidies to attract customers. In Ding’s eyes, a good product can grow rapidly on the Internet. Their platform will put more energy into providing customers with high-quality short-haul travel products instead of massive subsidies.
“We have nearly 2,000 employees at present and provide 70,000 travel offerings including food, housing, ticketing services, entertainment and shopping. So far, our business has expanded to 160 cities in China, with more than 12 million users across the country,” Ding said.
When talking about future plans, Ding said they will cooperate with their partner UTour, a Beijing-based company engaged in providing tourism and tourism-related services, to expand to the overseas market in the future. They plan to establish the first overseas branch in Thailand this year. Furthermore, Yaochufa will go public in China when the right opportunity presents itself.
With the rapid growth of private cars and the popularization of the mobile internet, China’s weekend travel market has entered an explosive stage of development in recent years. Online travel giants Ctrip and Tongcheng are setting up their own local travel business units, while Tripzm fully acquired leisure travel site Meizhouliu last year. Additionally, Yikuaiqu is going to be listed on China’s New Third Board, an over-the-counter market for growing enterprises.
According to a 2015 China online travel research report released by research institute Analysys International, the market size of weekend travel amounted to RMB 6.65 billion in China in 2014, accounting for 20% of the online travel market.
(Top photo from WeChat)