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China Online Leisure Travel Firm Adds Ten New Regional Service Centers

December 13, 2014

A popular piece of business advice that is a staple of marketing and organizational theory curriculums in business schools around the world is, “Be global but act local.”  Actually it is much more than acting local it is being local, i.e., closer to the customer.  Getting the mix right of being online and being physically local, even for online service providers, is always a challenge.  But, in terms of having the ability to expand business being local in certain verticals, especially those that involve a lot of customer interactions where human interactions are key, is a priority.

An illustration of this comes from China where Nanking-based, Tuniu Corporation, a leading online leisure recently announced it has set up 10 new regional service centers thereby significantly expanding its coverage of lower tier cities in China.

"The regional service centers are central to our drive to expand our customer base in lower tier cities and bring new and better travel options to Tuniu users," said Mr. Alex Yan, co-founder and chief operating officer of Tuniu. "We have been very pleased with the ability of the new regional centers to contribute to growth and have accelerated the expansion of our network through the course of the year. This has translated into strong growth in lower tier markets, with roughly 50 percent of gross bookings generated from second and lower tier cities in the third quarter, up from 40 percent a year ago."

With additional service centers in Luoyang, Lanzhou, Nanchong, Datong, Huzhou, Yichang, Zhuzhou, Zhangzhou, Taizhou and Deyang, Tuniu now has a total of 60 regional service centers throughout China.

Mr. Donald Yu, co-founder and chief executive officer of Tuniu added, "Going forward, we will invest in building our capabilities and resources at each regional center so that we can unearth more great travel products and tailor our services to suit local customer preferences. This will further differentiate Tuniu's customer service and product offerings, and reinforce our leadership in online leisure travel in China."

One of the reasons this story should resonate is that Tuniu represents how companies that provide personal services are adjusting to getting that mix mentioned above right based on business objectives.  Tuniu offers an impressive selection of packaged tours, including organized and self-guided tours, as well as travel-related services through its website and mobile platform. Online is critical since the company by its estimates has over 450,000 stock keeping units (SKUs) of packaged tours, covering over 120 countries worldwide and all the popular tourist attractions in China.

The company has positioned itself as a one-stop leisure travel solutions brand. However, that stop is the brand and the brand experience.  Through a combination of its online platform and offline service network, including approximately 600 tour advisors, a 24/7 call center and now 60 regional service centers, the brand experience is an interesting mix of virtual and physical, and it is a mix that appears to be working quite well.


Edited by Peter Bernstein