Super apps could offer a new model of distribution to drive impending
recovery of the Covid-hit travel industry, say investors in the travel
tech space.
Fritz Demopoulos, CEO of Queen's Road Capital, an early stage fund
focused on emerging markets, believes that super apps could offer a
"fantastic distribution opportunity" for the travel industry.
Speaking during the 'Face‐Off: Inside The Investors’ Ring of Fire'
panel session during the recent WiT Virtual Summit, he said: "It is
clear that we live and die by distribution, and it's unfortunate or
fortunate depending on how you think that Google has been a fabulous
channel for many companies over the years. But it has also led to a
massive outflow of capital from the travel industry.
"If you could possibly design your product and service around a super
app, for example, take advantage of certain design features and
implement them into your core offering to consumers, that might be an
opportunity," he added.
"Many companies in China have built their businesses around the
Tencent or WeChat ecosystems so that I am slightly optimistic, but I
think it is going to be a difficult slog."
On the other hand, William Bao‐Bean, general partner, SOSV and
managing director, Chinaccelerator, expressed greater optimism in the
adoption of the super app model, based on his experience working with
super app startup, TravelFlan, which had found success pre‐Covid and is
currently weathering the ongoing pandemic by selling “cups of coffee,
make up and clothing” until travel recovers.
Partnerships is key, he stated, citing the example of how TravelFlan,
despite not selling any travel themselves, has partnered with a Chinese
telecommunications company as well as Klook, airlines, SITA and hotel
players.
As well, he added that Travelflan also partnered with Samsung with
the super app pre‐installed on every Samsung Galaxy mobile in South
Korea, which expanded the free customer acquisition opportunity.
Mr Bao‐Bean added: "Their special sauce is having a customer
acquisition cost of zero. The cool thing is that in January 2020 they
peaked at 40 million users with still no cost of customer acquisition.”
The greatest advantage of this model, he continued, is that the
travel companies no longer have to pay Google or Facebook for
advertising. "So hopefully we can disrupt the model and take advantage
of this pretty difficult time for the industry. It can provide a
trust-based model to help the travel industry to come together, stay
profitable and serve customers the right way," he added.
However damaging the impact of the global pandemic had been on the
travel sector, both tech experts are hopeful that the crisis would offer
opportunity for those who stay the course.
“If all of us are super committed it is going to turn around and some
amazing entrepreneurs are going to build billion dollar companies. It
will be the ones that stay committed, who have a different perspective
and who understand super apps,” Mr Demopoulos concluded.