Tongcheng Travel, a leading Chinese online travel agency, is making strategic moves to capture the attention of Generation Z as part of their growth strategy. They aim to enhance brand influence through innovative marketing campaigns amidst ongoing travel restrictions.
The company has been capitalising on downtime by diversifying its user base, particularly focusing on the younger generation. With travel restrictions easing, Tongcheng Travel is positioned to leverage these efforts for future growth.
Engaging the Younger Generation
Tongcheng Travel is actively pursuing the younger demographic, particularly Generation Z, to strengthen its market position. This strategic focus is evidenced by the launch of various marketing campaigns tailored to engage and connect with younger users, as stated by Heping Ma, Tongcheng’s CEO.
By collaborating with Tencent and the Jiangsu Province Tourist Bureau, the company is co-launching initiatives targeting students, thereby expanding its reach across China’s lower-tier cities. These efforts are geared towards enhancing brand visibility and user acquisition.
Strategic Rebranding and Expansion
In April 2020, Tongcheng Travel rebranded itself with a new name, ly.com, and a redesigned logo to appeal to younger consumers. This rebranding is part of a broader strategy to align the company’s image with the preferences of a youthful audience.
The company’s focus on lower-tier cities — where about 87% of registered users are located — highlights its commitment to geographical expansion. This strategy caters to the rising demand for short-haul and local travel in areas recovering more rapidly from travel restrictions.
Performance Amidst Restrictions
Tongcheng’s accommodation sector performed better than expected despite the stringent COVID-19 restrictions impacting China’s tourism industry.
With a revenue of $192 million in the second quarter, the company maintained profitability, although this marked a 38% decrease from the previous year.
The adjusted net profit stood at $16 million, reflecting the challenges faced due to the pandemic’s impact on travel.
Innovative User Acquisition Strategies
The company has been blending online and offline channels to diversify traffic and drive user growth. Integrating technological advancements, Tongcheng Travel is transforming from a traditional online travel agency to a sophisticated travel assistant.
These initiatives underscore a focus on acquiring users in lower-tier cities, optimising app interfaces, and enriching tourism-related content to deliver a comprehensive service package.
Collaborations and Market Penetration
Tongcheng Travel is leveraging partnerships with urban and rural bus operators to penetrate underexplored regions effectively. By integrating services across urban and rural areas, they aim to grow their user base significantly.
The travel company is not only tapping into under-penetrated areas but also increasing its market share in local and short-haul leisure travel, anticipating a surge in business trips.
Emphasising Efficient Operations
An emphasis on efficiency in operations has allowed Tongcheng Travel to sustain user acquisition even during challenging times.
By focusing on merchandise recognition and user value, the company continues to optimise its business model to meet the evolving needs of travellers.
Outlook and Strategic Confidence
Tongcheng Travel’s executives express confidence in the industry’s prospects and the company’s development outlook, reaffirming their solid market position as a basis for future growth.
Tongcheng Travel is strategically positioned to capture the emerging market opportunities driven by Generation Z and local travel trends.
Their targeted campaigns and strategic adaptations amidst challenging conditions underscore a forward-thinking approach in the travel industry.