Sep 11, 2024

11/09/2024 by Yeoh Siew Hoon Traveloka ’s recent hiring spree of top executives has not gone un-noticed by industry watchers in the region – in quick succession, corporate travel veteran Carl Jones has joined as VP of Global Corporate Travel, former TikTok’s Tejveer Singh Bedi as Vice President, Commercial, Accommodation and Expedia’s air veteran Charles Wong as Vice President for Commercial, Airlines. All three come with considerable experience in their respective sectors. Jones spent most of his career in corporate travel, working with Carlson, American Express Business Travel and most recently with SAP Concur. Wong was with Expedia for nearly eight years, his last position as director, strategic global partners. Tejveer came up through hospitality before joining TikTok as regional director – hospitality and tourism where he was for over two years. A fourth hire to head tours and activities is expected shortly. These moves have given rise to speculation about what it means. Is Traveloka, which clocks 45 million active monthly users, beefing up to meet the rising competition in the South-east Asian markets, and ramping up expansion plans? It has declared its intention to expand beyond South-east Asia to North Asian markets such as Japan and South Korea. Is it preparing for an IPO, the prospect of which has been raised over the years, and if so, when is it timed for given the current rough market conditions? What do these new hires, who must cost a tidy sum, mean to the bottomline at a time when investors are pressuring their portfolio companies to be profitable? With US$1b in financing to date from major investors – among them, East Ventures, Singapore GIC and the Qatar Investment Authority – the 12-year-old company clearly has to find a way to return the investment. Its growth was stalled by the Covid years and while it has been building back post-pandemic, it’s operating in a very changed competitive environment. It is facing competition in its home market from players like Tiket.com and lately, TikTok, which acquired a 75% stake in Indonesia‘s top ecommerce platform Tokopedia, last year. The merger between TikTok and Tokopedia was finalised in January this year, creating an entity co-owned by TikTok and GoToGroup. This report from North Ridge Partners detailing the rise of TikTok in the region noted that “ TikTok Shop , (and its Live Commerce functionality) re-emerged in mid-December after TikTok Shop and Tokopedia, Indonesia’s largest local hero in eCommerce, merged to create a new market leader”. “The merger creates the conditions that could facilitate this new entity dominating live commerce in the world’s fourth most populace nation moving forward.” It quoted Campaign Asia, saying, “TikTok live commerce, for example, was trending towards an incredible US$20bn Gross Merchandise Value (GMV) for 2023 in SEA, and it’s growing at a staggering compound growth rate of 30 percent a month.” “Campaign Asia notes the significance of this achievement, saying that with South-east Asian eCommerce said to be worth about $100b, TikTok Shop alone could account for almost 20 percent by the end of its first year, driven largely by live commerce.” TikTok’s launch of ecommerce shops in markets such as Singapore, Malaysia, Thailand and Indonesia, has caught the attention of travel retailers. And while it has yet to launch in the travel category, it is seen as a natural evolution of TikTok Shop. Could TikTok’s success in short form video content, as a source for travel inspiration, translate to travel ecommerce? TikTok describes live shopping as “allowing brands to seamlessly integrate products from their TikTok Shopping experience into a live session. This lets merchants connect with their audiences in real-time and helps users buy what they discover while watching a brand’s stream. Live shopping gives users more opportunities to learn about, engage with, and shop from the brand.” Of course, the concept of live commerce is not new – it originated in China with Taobao. Trip.com Group used live streaming/commerce heavily during the pandemic and, following success in its home market, has been holding live streaming sessions in South-east Asia with much success. Speaking to travel brands about the possibility of TikTok Shop in travel, many say they would welcome the move, with one chief executive calling it “innovation, a new way of selling travel”. The question is whether consumers would buy a hotel like they buy lipstick – watch a video, then click to buy. “Travel is not an impulse buy, and a hotel is a higher ticket item,” he said. “However, maybe, it could work with destinations – tours and activities, perhaps.” A hotelier, when asked if people would buy hotels like they buy lipstick through short form content, answered, “In the future yes. It won’t look the same but essentially it will be the same mechanics.” Traveloka declined to comment for this article. Suffice to say, it’s not been passively watching the competition and this is a team known for its resilience, focus and execution. Other than the high-level hires, it held an EPIC Sale 2024 in August, which it said attracted over 35 million customers and served millions in USD savings through its discounts. Calling it “the most successful sales campaign in Traveloka’s history, it said the EPIC sale fueled a nearly two-fold increase in traffic in key markets, particularly Indonesia and Traveloka’s fastest-growing market, Malaysia. Let’s just say, things are about to get very interesting in e-commerce and travel commerce in South-east Asia. You might like