Lulutrip is a one-stop OTA specializing in European and American travel products. Established in Silicon Valley in 2007, it integrates tourism resources from North America and Europe and focuses on offering destination travel products for Chinese-speaking travelers. The offerings cover local group tours, independent travel, self-driving tours, cruises, hotels, visas, attraction tickets, and various customized group tour services. The core product of the website is the local group tour, allowing users to strike a balance between the restrictions of group travel and the freedom of independent travel. It also provides a variety of localized travel products to enable “fragmented independent travel” for tourists.
Recently, Lulutrip (http://www.lulutrip.com/) secured nearly ten million US dollars in Series A financing from Lightspeed China Partners. This is the second travel-related project invested in by Lightspeed China Partners following Tujia. In the future, the technological enhancement of travel booking platforms must be combined with professional services to deliver the best user experience. Therefore, Lulutrip stated that this round of funding will be used for product development, technological innovation, customer service experience improvement, and talent acquisition, aiming to provide more intelligent services.
Specifically, Lulutrip’s intelligent services are mainly reflected in the online booking process, achieved through tools and operations.
Tools refer to the itinerary planning tools that Lulutrip will launch to help users better plan their trips. As we move into the data-driven era, Lulutrip will also use collected data—such as users’ browsing habits and preference patterns of people visiting the same destinations—to provide smarter recommendations and reasonable suggestions. For example, if a user selects two attractions that are far apart within a single day, the system will issue a warning about the impractical travel route.
Operations are reflected in pre-trip and in-trip services. Jiang Hanyue, CEO of Lulutrip, said that in the past, OTAs sold travel products like a supermarket, but now the new generation of OTAs needs to focus on providing one-stop services that cover both the pre-trip and in-trip phases. Lulutrip optimizes the user booking process through technology—for instance, completing the booking of all products within 23 seconds. It has also established a customer service system for in-trip support, enabling users to seek help anytime issues arise.
Lulutrip originated in the United States, and its proximity to the resource side gives it stronger control capabilities than its competitors. However, the Chinese market definitely differs from the overseas Chinese market. How does Lulutrip achieve localization?
Jiang Hanyue believes that domestic users have a price-comparison mentality, so Lulutrip ensures the lowest prices across the entire web from the outset. Chinese people travel to Europe less frequently and generally spend less, so Lulutrip introduced a points mall where points can also be redeemed for products on other websites, such as QYER T-shirts and Jinjiang Inn hotel stays. Personally, I don’t think this approach greatly stimulates repeat outbound travel, but it should help increase user stickiness.
Additionally, Lulutrip focuses more on technological development to make usage more in line with user habits—for example, placing main services on WeChat and supporting diverse mobile payment methods like WeChat Pay. Currently, Lulutrip does not have a mobile app. Jiang Hanyue believes that launching a dedicated app for a niche travel service is not very meaningful. In the upcoming service account, users will be able to book products anytime, which is Lulutrip’s current main strategy for mobile deployment.
Moreover, with the continuous growth of the outbound European and American travel trend in the Chinese market, Lulutrip began opening flagship stores on e-commerce platforms such as Qunar, Tmall, and JD.com in 2013. It also distributes products through major websites like Tuniu, Baicheng, and Taozailushang, and partners with content websites like QYER and Mafengwo. Furthermore, it designs products based on current trends and user preferences, such as excavator experience tours.
Currently, the European and American markets are not yet mature and are still in the early stages. However, 2015 can be considered a brand-new era for European and American travel. Visas are no longer an issue, with multiple-entry 10-year visas increasing travel frequency. The main consumer group—the post-80s generation—also has sufficient spending power. Therefore, rather than discussing what competition Lulutrip faces in the European and American travel market, it is better to say it is working with existing online travel agencies to grow the market together. However, Jiang Hanyue also noted that Lulutrip’s advantages lie in its large purchasing volume, giving it strong bargaining power, as well as its technology. With seven years of experience, its internal systems, system integration, and manual coordination processes are already highly mature.
As people’s travel habits evolve, many services and products are still lacking, leaving plenty of opportunities in the travel market. In terms of business models, Jiang Hanyue believes that P2P has changed people’s behavior, with companies like Uber, Yidao Yongche, Airbnb, and Tujia covering transportation and accommodation. Thus, P2P models could also be explored for other aspects of travel, such as “dining, activities, entertainment, and shopping.”
The biggest challenge of focusing on a single vertical destination is finding and acquiring customers. Not only Lulutrip, but also Zouke founder Li Chen, whom I interviewed recently, shares this view. It seems the entire industry is tackling this issue (and thus, new opportunities emerge). However, Lulutrip believes the most effective method is still search engine rankings and establishing deep alliances with content websites.