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Mobile Tourism

In China, the world’s largest mobile-phone market by users, the usefulness of your handset goes far beyond making and receiving calls.

Text the name of a restaurant to a listings magazine and you’ll receive the address. Buy an air ticket and the confirmation number and flight times will be sent to your phone. Don’t speak Chinese? Text the phrase you want to know and services such as Moka.com will reply with a translation.

And the market is diversifying. In March 2008, CIB reported on i-Vision (尚视互动), pioneers of mobile TV in China, and in the October issue on the battle being fought among the developers of mobile phone operating systems (OS), which may well see its most significant action on Chinese soil.

But the incompatibility of networks and OS means many US cell phones don’t work in China, presenting an often unexpected challenge to travelers, while opening up a niche for companies offering mobile phone-based services for foreigners faced with the particularly obstructive language barrier and challenges in everyday communication. The speed of technological advancement, however, means that these firms face a challenge keeping up with the latest equipment, as well as the wants and needs of users.

SMART IDEA

Yoyoor, a Hangzhou-based startup founded in 2007 by Cybernaut (China) Capital (塞伯乐中国投资), is taking full advantage of the incompatibility issue and the language barrier by offering Nokia smartphone rental to visitors. Each handset features a GPS positioning and navigation system, a comprehensive in-phone listings guide covering several cities, a hotline to a 24-hour English-language call center for help and orientation, and international direct dialing. It also doubles as a high-resolution digital camera.

Consulting the locals also becomes a more plausible possibility thanks to the phone’s integrated Chinese phrasebook and dictionary which, though limited, contain useful phrases that appear in Chinese characters and can be played back, avoiding the embarrassment of not being understood at the second or third attempt.

Such services, says Yoyoor’s vice-president of marketing and business development, Ray Zhu, are designed to make traveling in China as painless an experience as possible. “We called the company Yoyoor because the phone is like a yo-yo — you carry it in your hand, it is magic and fun — but it also makes your life easier and safer as a traveler,” he explains.

Certainly, Yoyoor’s services may embolden travelers to pursue a more scenic route not planned in their hotel room the night before, safe in the knowledge that they can consult the GPS or dial the call center if they get lost. Those who have tried to unfold a map on a windy street corner, or who are reluctant to use a guidebook for fear of appearing conspicuously new to a city, will also no doubt prefer the convenience and even the street- credibility of consulting a smartphone.
Not all of its services are as user-friendly as they seem, however. In navigation mode, the phone’s GPS system shows the user’s present location, as well as a list of restaurants, bars, banks and attractions close by. Doing this returns a long list of businesses – performing such a search at a random intersection in Beijing, for example, produced 2,000 listings. Another downside is the lack of insurance. Lose your Yoyoor phone or have it stolen and you are liable to pay for a replacement, which is likely to set you back almost USD 600. 

REVENUE STREAMS

As well as phone rental and international calls — Yoyoor offers different packages, from a daily USD 12 rental fee with free outgoing local calls to pay-as-you-go packages — the company’s main revenue source comes from advertising, in the form of messages sent to the user promoting local restaurants or bars, as well as commission on flights booked or restaurant reservations made via the call center.

Strategic partnerships have already been signed with network operator China Mobile (中国移动), which offers Yoyoor lower airtime rates and volume discounts, and Air China (中国国际航空), which has given Yoyoor booths at Beijing Capital Airport. China-bound passengers flying from New York’s JFK, San Francisco and Los Angeles also receive a Yoyoor boarding-pass holder to enhance awareness of the service.

Since its launch in June 2008, Yoyoor has achieved moderate success, and now attracts more than 300 phone rentals a month. However, CEO Joss Shen is keen to broaden the company’s service offering. Its next project is Yofone, “a basic handset that is free to use for local calls but international call will be charged to your [hotel] room,” Shen explains. “Hotels will then decide whether they want to sell advertising to target their clients in the form of SMS, the revenue from which will be shared with Yoyoor.”

The service will be launched in Hangzhou in the coming months and will expand to Shanghai later in the year. In the long-term, Shen hopes to roll it out across China, and eventually overseas, as well as offering a similar service for Chinese travelers abroad.

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However, with Chinese networks poised to roll out 3G technology and working on compatibility with US handsets, and with an increasing number of mobile users now owning sophisticated smartphones — sales totaled 36.5 million units worldwide in Q3 2008, an 11.5% year-on-year increase according to IT research and advisory firm Gartner — the market for handset rentals seems set to diminish.

Zhu is aware that the company’s long-term future may well lie in offering its software and services as a downloadable package, rather than forcing users to rent a separate handset while they are in China. “People’s phones are dear to them, they like to use them and hang on to them, so we have to make all of our software compatible with all the different operating systems,” Zhu adds.

WHO YA GONNA CALL?

One firm that has a head-start in terms of offering services to existing phone owners is One2Call, a Dutch-owned company headquartered in Singapore, which offers telephone-based interpretation, personal-assistant and concierge services to foreigners in China.

One2Call owns and maintains a database covering 15 major cities in China and listings for more than 20,000 merchants, from bars and restaurants to shops and airlines. Included in the many details are the longitude and latitude, to allow for detailed proximity-based searches for export to handheld GPS devices, particularly useful for smartphone users.

According to managing director Harm Hindriks, “This is a very exciting time − 2008 was boom-time for us and I think 2009 will be even better.” He adds that the service is aimed not only at visitors, but also at “longer-term expatriates who have been here some time but who, without being disrespectful, have not learned the language sufficiently, like myself. I often use the service in fact.”

At a time of corporate downsizing and expenditure cuts, Hindriks also identifies the cost-saving aspect for companies with foreign staff in China, which are then able to dispense with the services of a full-time interpreter.

The call center is manned by a full-time staff of 34 and 100 part-timers, all of whom undergo three-months’ training before starting work. “You can ask our people absolutely anything and they will be able to help you,” Hindriks claims. “Out of every 100 people we train, only 10 make it through the three-month course. We deal with VIPs who are used to having problems solved and we have to be able to guarantee a high level of service at all times.”

With China likely to become an increasingly important destination for both business and leisure travelers, and with sales of smartphones soaring worldwide, the market for location-based, mobile tourism services appears set to grow. The challenge for contenders such as Yoyoor and One2Call is to find the right business model, both for advertisers and, more importantly, for customers.

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