Pinduoduo’s Latest Business Venture Could Be in Airline Tickets
Pinduoduo recently took a strategic step to enter air ticket business and possibly hotel bookings, travel packages, etc.
Following the launch of its train tickets business last year, Pinduoduo recently went a step further and seemingly launched an air ticket business on its app, 36Kr reports. Pinduoduo has not responded to any media inquiries concerning this issue yet.
Regardless of whether the service plug-in for the sale of train and flight tickets operates as an independent business or merely as an aggregator, it might be indicative of Pinduoduo's plans to establish a presence in the online travel sector. Unlike the specialized online travel platforms such as Ctrip and Tongcheng Yilong, e-commerce platforms generate more user traffic which opens a myriad of business opportunities. It is not a novel practice for e-commerce platforms to go into online travel: Alibaba operates Fliggy, JD.com has JD Travel, etc.
In the future, if train tickets and plane tickets manage to generate enough demand, it is expected that Pinduoduo might also venture into hotel bookings, travel packages and more, a direction which, as opposed to tickets that yield little to no commissions for Pinduoduo, has more chances for profitability. Meituan Dianping’s financial report data shows that in the four quarters of 2019, the gross profit margin of its hotel booking business was as high as 88%.
While the COVID-19 epidemic has undoubtedly hit the tourism industry hard, China's tourism industry has shown signs of recovery. According to data from the Meituan Research Institute, on the May 1st International Labor Day in 2020, 96% of tourist attractions and 80.1% of accommodation businesses across the country resumed operations. The consumption scale increased by 295.9% in the first five days; high end hotels recovered 89% of their turnaround, and the recovery rate for non-high-end hotels stood at 64.7%.
