Founder of KKday Chen Ming-ming explores the vast potential markets of self-arranged travel.
Chen Ming-ming, founder of Asia’s largest online travel platform KKday, used to have titles such as co-founder of ezTravel Co. and Startravel, as well as general manager of ezfly Corp. Now, he is also an entrepreneur. In 2015, he single-handedly built up KKday, which has organized over 6,000 local tours with over 200 employees in 10 offices across Asia.
Working in the tourism industry for 17 years, Chen has faced a variety of challenges and struggles. In 2000, he gave up the stable income of being an engineer and co-founded ezTravel Co. Unfortunately, the business soon encountered troubles when the dot-com bubble burst. In 2003, he jointly founded Startravel. However, as soon as the business took off, there was an outbreak of severe acute respiratory syndrome (SARS).
During those difficult times, Chen implemented his philosophy of “calmly waiting for proper opportunities to come,” as well as “no escape from challenges.” He said “bad economics is always a good opportunity for the company to lay low and prepare itself.” When the tourism market was miserable due to SARS, Startravel did not slack; instead, they took the chance to build connections with other leading companies that were once out of reach. In addition, Startravel also focused on advancing their online system. “When the country was removed from World Health Organization’s list of ‘infected areas,’ we were all ready to bounce back,” Chen said.
In line with Chen’s projections, the number of people going abroad surged, resulting in a resurgence of the tourism industry. Therefore, it only took Startravel another three years before the company began turning a profit, finally going public in 2008.
Chen also said although the number of travelers can easily be affected by various factors such as the economy and natural disasters, traveler numbers are still increasing in the long run. Therefore, he believes there will always be opportunities to develop businesses as long as you’re ready.
In 2010, Chen took over ezTravel Co. and became the company’s general manger. During his time as the head of the firm, he shifted the company’s main focus from domestic flight ticket sales to international flight ticket trading. The company went public in 2013.
Eyeing Asian markets, planning for tours.
Chen began noticing the growing popularity of low-cost airlines, online booking sites like Agoda and Airbnb, as well as consumers’ preference of directly booking through airlines’ official sites. The three main fields in tourism, he said, are airline tickets, accommodations and tours. After examination, Chen figured that the tour markets in Asian countries had not yet been developed.
He then decided to seize the opportunity and set up a local online tour platform with an operation similar to Agoda. Along with some partners, Chen set up a small space at the Center for Public and Business Administration Education in National Chengchi University. KKday was officially established soon after.
Perhaps due to his ample experience in entrepreneurship, Chen seemed to have less passion in comparison with younger entrepreneurs during our interview; instead, he was running at a more measured pace. Chen explained that he has built up many contacts as he has stayed in the same industry for years. “Unlike young entrepreneurs who need more time to explore the industry, I can spot business opportunities and seize them faster and more accurately.” Chen added.
Chen is considered a legend in the country’s tourism industry. At the age of 27, he was the supervisor of 80 employees at ezTravel; at age 30, he was the manager of 300 employees in Startravel. As he started in the business at a young age, he is willing to provide chances for younger employees to develop and explore their potential at KKday.
He pointed at KKday’s vibrant office and asked, “How many young employees do you think we have?” The average age of KKday’s employees is around 27 years old. Su Min-je, head of KKday’s business development team, is exactly 27 years old, overseeing more than 30 people and responsible for tour development. Having worked alongside Chen for a long time, Su said that Chen is willing to let employees try out their ideas, while giving some necessary instructions whenever needed.
As the online travel industry is booming in Taiwan, more and more agencies are setting up branch offices in the country and aiming for the international tourism market. Facing fierce competition, Chen still maintains his own pace with an optimistic attitude. He said that through the joint efforts of different travel agencies and companies, it will be much easier to promote the country’s tourism opportunities to global markets.
Enhancing competitiveness through insistence on developing business strategies on an international scale
Chen understands that the future of e-commerce depends on the global market. Therefore, when first starting KKday, all strategies were set on an international scale. Even when fundraising for the firm, he sought money from overseas corporations. KKday received US$4.5 million in its initial round of funding in 2016, and also raised an additional US$7 million at the end of last year. Most of KKday’s investors are from areas such as Hong Kong and Singapore.
To date, KKday’s business strategy of operating on an international scale has received positive results. Chen said that people in Taiwan arrange their accommodation abroad through booking on Airbnb and Agoda nowadays, while foreigners are starting to use KKday as a tool to schedule their visits to Taiwan and other countries.
Founded in 2014, KKday will use its new funding on Rezio, a booking management platform it began piloting in March, starting with Japan and Taiwan.
Created for tour operators and activity providers, especially those who previously operated mostly offline, Rezio can help reduce operational costs by allowing its users to set up a booking website that works with different payment gateways and manage availability by tracking bookings from different channels. The latter is especially important during the pandemic because many venues have set up capacity limits.
The company says that Rezio has served more than 150,000 customers so far, and will be launched in more Asian markets with its Series C funding. KKday currently has more than five million users on its platform, and has hosted more than 30,000 tours and other activities in 92 countries.
In May 2020, the company began seeing more demand for local travel in Japan, Taiwan and Hong Kong. This parallels Klook, which also saw an increase in demand for “staycation” bookings that helped it recover after its business was hurt during the early stages of the pandemic in Asia.
In a statement, Cool Japan Fund managing director Kazushi Sano said his firm invested in KKday because “we believe that KKday’s strong execution and innovative mindset will drive the tourism industry in Japan even under adverse conditions.”
KKday’s 3 Steps to Go International
The first step concerns the increase of product exposure to the mass audience to discover potential customers via different marketing channels. After certain customers have been selected as the most potential segmentation, their behaviour would be analyzed by marketers in order to develop suitable marketing strategies. (Want to know more about Marketing Testing? Click to have a look at GMA Boot Camp’s syllabus!)
The next step concerns the optimization of funnels to increase the conversion rate. This could be realised by the massive personalized communication with the audience and “call to action” devices. To retain the customers that successfully journey through KKday’s website and purchased products, reward systems are developed to enhance customer experience in hopes of generating good reputation.
3.Expansion to New Market via Localization
The last step of the approach concerns the adaptation of local perspective during the international marketing of the product. According to Rebecca, KKday’s Regional Executive Director (Hong Kong & Southeast Asia), “the key to localization is to increase the brand’s familiarity and shorten its gap with the customers”, which means to negotiate a more intimate relationship between the brand and the customers. As [Article 1] has gone through marketing testing and funnel optimization, the below will focus on localization.
The Extent of Localization – How far you can go international
i.Localised Promotion and Campaigns
One means is to localize via the social media channels and content. Local bloggers and influencers can be invited to endorse the brand so as to increase the brand’s trustworthiness. Rebecca also emphasized the use of local inside joke to further increase the brand’s familiarity.
The marketing campaign materials, meanwhile, should be differentiated targeting different regions.
Exclusive and localized products and services can be developed to attract local customers. For instance, Rebecca discovered that Japanese tourists have a liking of styling their hair in Taiwan’s Salon, KKday thereby launched exclusive tours that visit professional salons in Taiwan, exclusively for Japanese.
Hire the locals as you can never think local as locals. Rebecca’s philosophy of hiring would be trusting the locals and giving enough authority to them. Embracing cultural difference is as important – Rebecca just realized as KKday expanded to Thailand that Thai in general has a loose concept of business punctuality, which might be due to the chaotic traffic there. The Thai-5-minute is usually not equal to actual 5 minutes. Adapting to these culture may be difficult at times but it is necessary as local team is of crucial importance when it comes to area expansion.
iv.Localized Customer Service
Below consumer behaviours are discovery from Rebecca’s hands-on experience as KKday expanded to different ASEAN countries – Hong Kongers feel more secure when they can talk through phone; Singaporeans are in favour of thoughtful plans with details and contingencies; Korean values speedy services, etc. There might not be fancy tactics to deal with these cultural differences. Rather, simply acknowledging them and try to cater to these cultural preferences will already make a difference.
If you think the above points inspirational, congratulations, but if not, don’t get disappointed. You are right in that the above theories are not exclusively owned by KKday, and in fact, can be heard anywhere. But why still KKday can be so successful? Rebecca highlighted that “It is important to accept that nobody and no products are perfect. After all, the definition of growth marketing is to attain user growth in the fastest way, so if there is really a key to expansion, that would be “Don’t wait, do it first, listen to how the market respond, constantly improve your approach, and your business will get better and better.”
Side Story of eBay – Selling Chinese phones to the US for 100M+ value
Whereas for KKday, localization can be done by coming into contact with the locals, eBay has harnessed its AI-driven platform to remarket some of its products. According to Candace Cheung, eBay APAC’s Senior Manager in Strategic Marketing, a Chinese-manufactured mobile phone brand Leagoo is a case in point – with an attractive price of around USD 150, it turns out that the transaction amount of it in a US city was amounted to 100+ Million, what an exemplary case to show how data are used to fill inventory gap in eBay. Localisation is not only important to marketing expansion for start-ups like KKday, but also to 25-year-old companies like eBay.
AirBnb – From Localisztion to Personalization
Without owning actual properties, is the asset of Airbnb their interface? Robert, Ex-director ( Business Operations & Strategy) of Airbnb, affirmed that the valuable product that Airbnb sells is the personalized experience instead. To sell the personalised experience, Robert stated that the brand designed a series of advertisement that communicates how one can use the interface Airbnb to connect with people instead of merely renting the apartment.
The slogan, “Don’t just go there, live there.”, is therefore developed to express this connotation. Another highlight of selling personalised experience is to use baits.
Although there are not a lot of treehouse properties for rent, the advertisement often highlights treehouse as a bait to attract and inspire customers. It connotes how Airbnb can connects people with unique and amusing experience.