China, Travel, and Tech-Driven Destination Inspiration
Interview #7 with Zanadu’s Co-founder Dirk Eschenbacher
About Zanadu: As China’s number one premium travel agency and lifestyle content platform, Zanadu brings products ranging from boutique and luxury hotels, villa rentals, domestic short stay luxury vacations, to high-end international package trips, cruises, and signature, bespoke journeys. Continually looking for new and innovative ways to engage their target audience, Zanadu has been recognised for its innovation and unique product offering multiple times over its 6-year lifespan.
About Dirk Eschenbacher: Originally from Germany, Dirk set out for Asia nearly 20 years ago and hasn’t looked back since. Before co-founding Zanadu and becoming the Chief Creative Officer, Dirk worked for digital marketing power-house OgilvyOne and global advertising group DDB. He holds a PhD in Design and Visual Communications from the Central Academy of Fine Arts.
Turbulence: Tell us a bit about your background. What attracted you to China and how did you wind up creating a luxury OTA there?
Dirk Eschenbacher: I’m originally from Germany and got my start in travel in the late 1990s when I started thaisite.com — an online travel agency based in Koh Samui specialising in different Thai tour packages. After a few years there, I moved to China where I worked for leading advertising agency Ogilvy & Mather taking on various directorial roles on the creative side of marketing. In 2011, I co-founded Zanadu where I look over the brand, marketing, and innovation.
Over the past decade, the Chinese have begun travelling internationally, with the country now providing the most outbound tourists in the world. We saw an opportunity to offer travel products to the higher-end of this market, selling customised tours, VIP excursions, and travel packages to the world’s most amazing destinations, as well as hand-picked boutique hotels, exclusive villas and resorts. The idea paid off, and now, we are the leading luxury and bespoke travel operator in China.
Your primary focus is Luxury Travel, which, with China’s burgeoning middle and upper class presents a significant market for you. However, the vast majority of this demographic is relatively new to this sort of travel. What particularities and cultural uniquenesses do you need to know when working with them (are the last minute travellers or do they tend to book more in advance)?
Chinese travellers are relatively new to the world. For the longest time, either getting a passport was difficult or, if the person did have one, the visa process was often long and challenging. In the past ten years, however, this has changed. The Chinese government has made getting a passport more accessible, and at the same time, Chinese travellers can go to more destinations without needing to apply for a visa in advance. This policy shift was a complete game changer, allowing the Chinese to travel more freely than ever before.
Likewise, as the economy has grown, so too have the size of the middle and upper class. Before this passport and visa liberation, outbound travel was the preserve of the elite, with many of these travellers already possessing a global background. Now, the demographic is much more homegrown, with large swathes of the population either experienced travellers or on their way to getting there.
As you can imagine, this increase of outbound travellers will mean more Chinese guests at hotels and resorts. While many travellers are comfortable speaking English, they do often request more Chinese touches to their travel experience — think guides that speak their native language or Chinese music playing in their transfer vehicle.
Of course, our travelling demographic has varying levels of sophistication, and we cater to all of them based on their needs, means, and requests. For us, this means providing the appropriate levels of support during all phases — planning, booking, on the ground, and post-travel — to ensure that the trip goes as smoothly as possible. To that end, it’s also important that our suppliers understand these points so that our clients’ trips become memorable experiences — and for the right reasons.
Chinese consumers are very receptive to word-of-mouth and base a considerable percentage of their purchasing decisions on feedback they receive from people they know. To that end, we use our content to help inform them of travelling and the world to make the journey a more comfortable experience.
Furthermore, Chinese luxury travellers are quite price-sensitive. They want to make sure that they’re getting as much value and return from their trip as possible. Regarding booking behaviour, it depends on the travel period. In general, though, they behave like European travellers and tend to book in advance for most events, including the big ones: Chinese New Year and the Golden Week in early October.
China is one of the most connected places on Earth, which in turn, generates copious amounts of data. How do you see this deluge impacting the Chinese travel market? How do you leverage it to differentiate from other OTAs and TAs?
China is hugely connected, meaning that Chinese consumers are almost always plugged into social media and other platforms. They’re continually using these mediums, especially Tencent’s WeChat, which is the leading social media and messaging app in the country.
Additionally, influencer marketing from celebrities and other ‘influencer marketers,’ drives Chinese consumer habits. It’s also worth noting that the “I want to do that too” effect from seeing friends and family’s’ pictures of travel on social media plays a significant role in steering travel trends.
It’s not surprising then that this environment generates a wealth of information for us and lets us stay a step ahead of our competition. Therefore, our primary marketing channels are content-based. Currently, we publish a magazine, produce video, have a content partnership with Tencent and other social media platforms, and run a VR platform for our audience to explore destinations.
From a marketing and business point of view, studying and utilising these channels puts us far ahead of the curve. This strategy lets us quickly react to and jump on emerging trends to engage our audience and build packages that are popular at the moment.
What’s also interesting in China is the connection between social platforms and banking. As I mentioned, we have a channel on WeChat with a sizeable following. Tencent, which owns WeChat, has a payment tool called “WeChat Pay” which acts as an e-wallet. Therefore, if someone is browsing our WeChat channel and sees a product they like, they can directly purchase it.
As you could imagine, reducing the friction around payments increases conversion, and bookings made from a mobile device already account for most of the total purchases. So in that sense, it’s imperative to us, from a marketing point of view, that we engage our audience through these social channels.
That’s quite impressive. Here in Europe, we don’t have anything even remotely close to that sort of integration between social platforms and banking.
Yes, it’s incredible. In fact, here in Beijing, we pay with our mobile phones for almost everything — from restaurants to groceries to cab fares. I rarely have my wallet on me. When I go back to Munich to visit friends and family, it feels strange for me to carry it around and to pay with a card, or even worse, paper cash.
(laughter)
You target the Chinese market exclusively. However, you’re selling products that are all over the world (hotels, resorts, transfers). What are the operational difficulties with working with external providers as a Chinese company?
In our business, our clientele is often very busy; think upper management, C-levels, and entrepreneurs. As such, it just isn’t feasible for them take a few weeks holiday away from the office. Therefore, they’re looking for destinations and products that let them pack as much quality and options as possible over a short period to spend quality time with their families and create memorable experiences — and gain bragging rights in the process.
For example, Bhutan is quite popular with this demographic right now. We have a product that executives and VIPs are purchasing that exactly meets these criteria. They get to discover a beautiful country, not too far from home, with the ability for, say, the father and son to go out mountain biking in the foothills of the Himalayas while mum and the daughter get to bond in the spa and do other family activities.
So from an operational and sourcing perspective, it’s essential that foreigner providers and suppliers understand these points: Chinese tourists expect to be able to have genuinely memorable experiences and have plenty of options to do so during their stay often with the ability to communicate in their language, maximising the return on their trip.
It’s also important for foreign companies to understand the role that influencers and other media play in shaping consumer trends for travel destinations and the impact that it can have. For example, in 2012, the comedy film Lost in Thailand became the highest-ever domestic box seller in China. Without getting into the details, the film shot many of its more memorable scenes in the Thai city of Chiang Mai.
Shortly after the release, we saw a massive spike in trips booked to Thailand and Chiang Mai. The film vaulted Thailand as one of the top tourist destinations for Chinese tourists, and now, China represents the most significant source of inbound tourism for that country. Local tourism officials, resorts, and hotels should keep an eye on these trends and prepare accordingly.
Perhaps looking at it from the other way around, trust and design are vital for us when we approach foreign operators. When we built our website, I wanted to make sure that it looked a behaved like the ones you find in the west. This requirement meant using a polished layout and accurate photos, which is surprisingly rare in China. In turn, our providers see us accurately representing their products and brand, which is of course, imperative to them and builds trust with us in the process.
In the end, and like I mentioned earlier, Chinese travellers are relatively new to external tourism. Of course, this means that foreign companies are also still learning how to accommodate them. However, as the number of outbound tourists from China continues to explode, bridging this cultural gap will be crucial.
In general (and this is a question we’re asking all of our interviewees), what do you see as the biggest challenge facing tourism and the travel industry today?
The biggest challenge the travel industry is facing is the need to innovate relevantly and sustainably. A new generation of traveller wants to experience new concepts of hospitality that align with trends like working in shared co-working spaces, a growing demand for sustainability and environmental responsibility, accessing local knowledge and fresh, relevant and unique experiences for every budget level. The travel industry as a whole is very traditional, and it feels that many players are very slow to recognise and adjust to new trends and demands. This includes innovative use of technology that offers ease and utility throughout the purchase funnel, from travel inspiration to booking to in-destination service.
On a local level in China, there is increasing pressure to stay on top of tech developments. Trends in user behaviour on digital devices change rapidly. What was the norm today, is out of date three months later. Enhancements to mobile payment systems, new functionalities in key applications like WeChat, trends in social media use are developing with increasing speed. It takes digital savvy management and the ambition to stay at the forefront of these developments to engage, delight and convert customers.
Originally published at www.kantox.com on December 5, 2017.
