PKFARE Song Jianchun: From brush face BD to competition B2B second half

The original intention of tourism B2B is to effectively connect the upstream and downstream of the industrial chain, and ultimately achieve a win-win situation in the industry.

In terms of time, as early as 2007, the 51Book platform operated ticket agency transactions. By 2013, after the Octopus won the A$150 million A round of financing from Jiayu Fund and Softbank China, the tourism B2B set off another round of climax.

At that time, the tourism B2B platform in order to obtain customers, often with high rebates, high subsidies to the two B-side merchants to benefit. But the logic of the B side is different from the C side, and the usage habit cannot be converted into a dependency on the platform. This is also the case. In the second half of 2016, Youke Tourism, Tiantian Travel Fair, and Jiyu Tourism have successively raised funding problems.

Profit-seeking is the essence of commerce. "burning money" can only be a no return to the "subsidy war."

Tourism is a resource-distributed industry, and the needs of tourists are gradually diversifying and fragmented. For small and medium-sized travel agencies with insufficient resource control and weak competitive voice, the B2B platform may be a “just-needed”.

The core appeal of small and medium-sized travel agencies to the B2B platform is to provide differentiated products with the ultimate goal of increasing profits. But for the platform, how to get the supplier, how to solve the product homogenization, how to find new profit points in addition to the commission... can be said one step at a time.

From the 2014 batch of flowers, to the capital winter of many platform capital chain breaks in 2016, this year, the tourism B2B platform once again ushered in the favor of capital. Octopus, Daobang, PKFARE (Peking) have announced financing news, and the business scope of the tourism B2B platform has also begun to shift from a simple transaction to a multi-service such as supply chain and finance based on transaction data.

As the concept of the second half of the Internet proposed by the US group Wang Xing, the tourism B2B is also welcoming the "second half."

The four years of the first half of the turn, it is also the four years of PKFARE (Bi Ke) founder and CEO Song Jianchun resigned from ZTE.

Why did he leave ZTE? How to carry out tourism B2B business? How to face the new competition in the second half?

Business backbone left ZTE

In the summer of Shenzhen, the weather is so hot that people don't want to talk. In a venue, two or three hundred people have been closed for three days.

This is a startup competition that PKFARE (by Keke) founder and CEO Song Jianchun has participated in. In the three-day competition, the Idea speech, the proposal PK, the team out of the demo... the entrepreneurial process is all gone.

This competition is the catalyst for Song Jianchun's life.

At that time, he served as general manager of products in the ZTE Business Travel Division. Although the company is very large and dealing with all kinds of colleagues and customers every day, Song Jianchun feels more and more lonely - "Not everyone has such a big Passion."

He refers to entrepreneurial passion. When Song Jianchun was in college, alumni Lei Jun had returned to the school several times to give lectures. Every Song Jianchun will listen, and he still remembers how Rebec sent a great shopping voucher at the lecture.

But after work, he will talk to others about starting a business, and it will be difficult to get approval.

In this competition, Song Jianchun re-recognized, "There are so many people with passions around!" More importantly, this game brought him to the capital. “My angel investor knows this game,” Song Jianchun said. “Otherwise, the project will start a year later.”

He hopes to establish a B2B trading platform for cross-border travel products, lowering the trading threshold and smoothing trading barriers.

Song Jianchun is responsible for business travel in ZTE. He is very clear that there is actually no information asymmetry in many domestic B2B businesses. “The products and advantages of each other are very clear among the large suppliers. The scene only exists in the big B to the small B, but what are the pain points and problems after the large suppliers sell their products?”

On the contrary, in the international arena, the pain points are real and widespread.

Song Jianchun dismantled three cores: language, time difference and exchange rate.

If it is the domestic market, then B2B business only needs "Wangwang + Alipay" to get it. However, in the international market, even if the purchasers pay huge financial, human and sincerity to overcome the problems of language and time difference, the exchange rate is always a hurdle.

"For example, all countries in Ethiopia do not accept the currency. Only one US dollar can be used to deal with business." One of the solutions centers of ZTE Business Travel Center was established in Ethiopia. Song Jianchun had personal experience. "But the exchange rate of the US dollar is also fluctuating. What exchange rate settlement?"

Song Jianchun further explained that cross-border remittances require at least one working day to be delivered, but the exchange rate of foreign exchange is constantly fluctuating. If there is a delay, it will be unfair to both parties; in addition, many foreign exchange currencies are only in London. Or the financial market in New York can trade, which also brings inconvenience to cross-border transactions.

As the saying goes: "Curious to kill the cat." Song Jianchun especially wants to see if his idea can land in the real soil, can grow into a towering tree.

In 2014, he really couldn't help his curiosity, resigned from his work in ZTE for five years, and embarked on a pioneering career.

At the beginning, Song Jianchun chose to cut in from the ticket business.

After summing up his work experience and research results, he believes that the ticket is the starting point of travel, not only just needed, but also the concentration of the ticket supplier and the repurchase rate are very high compared to the hotel and destination products.

More importantly, the airline has a strong voice in the trading chain.

"Airline is like a big coffee in our circle of friends." Song Jianchun made an analogy. "When big coffee moves from QQ to WeChat, everyone will slowly follow the migration." According to his assumption, if the ticket business is going smoothly, Then it is logical to extend to hotels and destinations.

Challenges in overseas markets

BD expansion is the weakness of the startup team. Without the endorsement of a large company, getting a supplier is tantamount to "empty gloves and white wolves."

Song Jianchun can only "slap his face".

When PKFARE was founded, the team had only seven people. Because of his overseas business, Song Jianchun often needs to fly around the world.

"What is the rhythm of the bed for more than 70 hours in a row," he said quickly. "On the first day of the first flight, Hong Kong flew to Singapore; at 5 o'clock, it arrived at the city at 6 o'clock. Eat a meal near the client company, talk about business in the morning and afternoon; fly to Paris at 6 o'clock in the evening, talk about the same rhythm for one day, then fly to Berlin, and then take the suitcase directly to the exhibition booth after landing."

Co-founder Yu Youzhen. He is primarily responsible for the BD business in the team, and he has been flying almost in the air in the second half of 2014. By the end of the year, the number of miles was counted, and the national ranking was 47.

I also mentioned that the first customer that the team talked about was HIS Travel Group, which is known for its conservative and cautious Japanese. In order to open the market, he led the team to visit several times and kept the contact frequency of one email per week. After 9 months, he only got the appointment letter from the other boss.

In fact, the “brush face” BD is only an early practice of the PKFARE team. Song Jianchun’s real strategy is to capture players who have a core voice in the industry. “Customers, channels and suppliers, each industry has a different approach.”

For example, in the ticket business, PKFARE mainly considers GDS, airlines and destination resource agents when looking for upstream suppliers, and large OTAs, offline travel agencies, and business travel management companies in downstream companies.

Song Jianchun originally planned to start with the domestic GDS branches and then talk to foreign institutions one by one. But in nearly 200 countries around the world, the languages ​​are different, and it is obviously unrealistic to talk one by one. In this case, starting with the GDS headquarters is a more reasonable choice.

After changing the way of thinking, the progress is much smoother than before. By the beginning of 2016, PKFARE has signed global strategic cooperation agreements with several major GDS headquarters, including Amadeus, Travelport and Sabre.

While advancing the progress of BD, Song Jianchun also made arrangements for the three pain points of language, time difference and exchange rate.

He gradually formed an internal translation team using nine languages ​​to meet the needs of different language clients and supplemented the deficiencies of AI translation. At the same time, he has spent three years in Beijing, Hong Kong, Seattle, London, Dubai since 2014. Open offices and offices in key cities such as Singapore and Tokyo, providing 24-hour real-time delivery services.

In order to avoid the floating risk of currency exchange rate, he cooperated with international financial institutions to develop a dynamic hedging financial strategy. "In fact, it is a kind of futures," Song Jianchun explained. "We define the algorithm and land it by financial institutions." In addition, he also set up offshore accounts in different regions to establish a pool of funds to hedge foreign exchange risks.

But if there is no price advantage in the supply of products, or fall into the homogenization trap, then these measures will be castles in the air.

Song Jianchun was born in information, and his strategy is very hard: technology, or technology.

In terms of price, PKFARE uses machine algorithm and artificial intelligence technology to compare prices before products are put on the shelves, and to select products with price advantage. For product differentiation and scarcity, PKFARE (by customers) Collect and analyze big data of search, inquiry, reservation and transaction, find the transaction needs of customers to be satisfied, and then find and match the ticket products in a targeted manner.

However, in the expansion of the hotel business, Song Jianchun still maintained a cautious attitude. “Overseas markets have big challenges.”

He believes that before the market penetration rate of the brand is less than 40%~50%, it is not suitable for horizontal expansion in the business category.

He believes that the hotel business is similar to the ticket, and can be based on the same idea.

“Airfare and hotels are key components of travel products, and the two are almost identical in terms of distribution and links.”

“The space in the market is quite large,” Song Jianchun said. “In addition to organic wine, large transportation related fields such as train tickets, ferry tickets, cruise ships, etc., add up to a very large market.”

At present, PKFARE's business scope has reached more than 100 countries and regions around the world, with more than 200 upstream suppliers and more than 10,000 downstream buyers.

New competition in the second half

On April 16, 2018, Song Jianchun attended the dinner of the A round of financing.

At the press conference, PKFARE (Bike) also announced a strategic cooperation with Beijing Zhongguancun000931, the stock bar bank, launched a tourism financial product "credit".

In April, the financing news of the tourism B2B platform continued. In addition to PKFARE (Beyond the guest), there are also Octopus and Daobao announced financing news. The former not only has a financing amount of 600 million yuan, but also high-profile S2B business under the help of Ant Financial Service; while the latter has deepened the international hotel B2B for many years, and has a strong accumulation in distribution system research and development and interface docking technology.

Under such circumstances, PKFARE (competition) will be greatly challenged if it cannot provide more operational capabilities and product services, but simply focus on eliminating information asymmetry.

One of PKFARE's practices is to refine the trading data of the platform and serve as the basis for bank credit, and provide financial support for small and medium-sized travel agents through the “Credit” product.

For small and medium-sized tourism enterprises, they face difficulties such as single access and distribution channels, tightening of settlement rules for OTA and online platforms, and increased pressure on cash flow. At this point, the availability of working capital has become an important factor in its development. However, due to the industry specificity of heavy service and light assets, it is difficult for them to obtain bank credit.

Although banks know that these companies have capital needs, it is difficult to land on the business. First of all, the bank's customer acquisition cost is already high, and it is necessary for a family to look at the financial situation; even if there is intention, it is difficult to mortgage the tourism products such as motor wine; even if the mortgage is in kind, the bank is difficult to dispose of the bad assets of the tourism product; The custody fee is also a small expense.

“What is our role? We have transaction data and the ability to dispose of bad assets.” Song Jianchun said, “For the simplest example, small and medium-sized travel agents have booked 100,000 hotels, if not, they may 70,000 can be returned to the hotel, then I can give 70,000 credit."

In the actual business, Beijing Zhongguancun Bank will provide financial licenses and artificial intelligence risk control capabilities, while PKFARE (Bike) will use the machine algorithm to analyze platform big data to achieve automatic screening, credit, audit and lending to online small and medium agents.

"We both hit it off and have some intentions before the Spring Festival. We have already started cooperation last month." Song Jianchun revealed that the Beijing Zhongguancun Bank will give PKFARE (by the customer) a credit of 100 million yuan.

He believes that the data on the PKFARE platform will also integrate new requirements that cannot be touched by perceptual experience. For example, a travel agency has made charter products from Shanghai to Tahiti, but it may be difficult to seat enough seats based on its own capabilities. PKFARE can analyze transaction data and provide flight seat subcontracting solutions. The land extends from Shanghai to Tokyo, Taipei and other places, reducing the risk of travel agencies.

In addition, Song Jianchun introduced that PKFARE will also compare the transaction data horizontally to provide risk management services for the airline. “More airlines rely on distribution offices in various regions to gamble, and rarely rely on data to make judgments.”

It is reported that PKFARE's new round of financing will be mainly used for market expansion, AI and financial product research and development.

Regarding entrepreneurship, Song Jianchun has a feeling that entrepreneurship is not caused by a specific moment or scene. If there is an internal driving force, entrepreneurship is an inevitable result.

Notes:

Yang Yanfeng, an associate researcher at Beijing Union University, analyzed in an interview that this year's tourism B2B company frequently obtained financing. One of the reasons is that the tourism 2C has little chance, the investment structure tends to 2B enterprises; the second is the entrepreneurial company through the capital winter and the market. After the test, the remaining is king, easy to get capital favor.

The tourism B2B platform after the "winter" seems to be a bit more rational. “Subsidy is to drink and quench thirst” has basically become a consensus. How to provide value to the tourism industry has become a more mainstream idea.

The B2B platform, due to the status of “intermediary”, involves a wide range of suppliers and capital flows, which provides opportunities and scenarios for supply chain finance. PKFARE (Biker) and Beijing Zhongguancun Bank launched the tourism financial product "credit" is this logic.

But there are also a lot of players who are interested in the tourism supply chain financial market. As early as 2014, Tuniu Tourism has established a reserve of 5 billion yuan for providing financial support to its partners. In April last year, the tourism B2B platform love group has announced the strategic investment of Zhenjiang Wenlv, and said it will be committed to Solve the painful points of traditional travel agencies' large capital demand, high pressure for advances, and difficult loans, and avoid the security risks of supply chain funds.

In my opinion, the technical strength of PKFARE is the core competitiveness of the company. Its business direction, such as supply-side resource collection, procurement-side demand integration, product screening, aircraft distribution solutions, and tourism financial products “credit” are inseparable from its data integration and analysis capabilities.

How to establish a strong technical barrier will be one of the key factors for PKFARE (Biker) to win in the second half of the tourism B2B competition.

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This article was first published on WeChat public account: New Travel Boundary. The content of the article belongs to the author's personal opinion and does not represent the position of Hexun.com. Investors should act accordingly, at their own risk.

(Editor: Zhang Yang HN080)