Skift Take
Have you ever been on a trip and wanted one app to book your museum entrance tickets, get you train tickets, score you concert seats, and maybe throw in a cooking class for good measure? Klook wants to be there for you.
As Klook celebrates its 10 anniversary this month, the online travel agency for experiences is undergoing a significant strategic evolution.
Klook is already Asia Pacific’s largest online seller of walking tours, cooking classes, Mario Kart tours through Tokyo’s streets, and other travel experiences. But now it’s expanding into domestic travel, social commerce, and seamless in-trip experiences.
“We want to build an app that consumers will use every time they need to go to travel,” said Eric Gnock Fah, president and co-founder. Over 80% of the company’s bookings go through its app.
Why it matters: Klook has raised more than $900 million in financing since its founding a decade ago this month. It has the firepower to shape expectations for buying travel during a trip in the world’s largest and fastest-growing region.
Skift spoke with Fah after he appeared on stage at the Skift Global Forum in New York City last month.
Pivot From Cross-Border Sales
“Before Covid, we were 100% cross-border sales,” Fah said. But people don’t cross borders as often as they travel domestically. So Klook built up its domestic travel offerings, which now account for a “significant” portion of its business, Fah said.
Klook’s pivot from exclusively cross-border sales to a significant emphasis on domestic travel offerings marks a crucial adaptation to changing travel patterns in Asia Pacific. This shift not only diversifies the startup’s revenue streams but also increases its user engagement and frequency, potentially leading to stronger customer loyalty and recurring business.
Social Commerce
The company is leveraging social media for marketing and sales. Klook attributes much of its growth in China in the past two years to social media-driven sales. Popular chat and payment apps increasingly let influencers sell services, making it easier for companies like Klook to know which creators are most effective and to partner with them.
Klook is tapping into the power of social proof and convenience, which could significantly expand its reach and conversion rates. Western travel brands may be eyeing the startup’s experiments for what’s to come as Western social platforms have been late to embed direct sales of services and to offer clear tools for marketers to attribute sales.
Ground Transportation Drives Growth
Rail, taxi, bus, and ferry transportation is an over $150 billion growth area in which Klook is often early in digitizing ticket sales.
Klook is streamlining in-trip services. Example: Users can now book Japanese bullet train (Shinkansen) tickets with a simple QR code scan, which up to a few weeks ago typically required a complex, on-the-ground interaction with a kiosk or sales agent.
Klook’s app helps visitors to a country book all the relevant transportation for their trip within it without having to figure out local ticketing systems in a foreign language.
Fah sees Klook’s focus on creating near “frictionless” experiences as a major differentiator in the competitive travel market, especially for international visitors navigating unfamiliar systems.
The ground transportation segment is growing yet still largely not sold in significant volumes by the sector’s Ctrips, Agodas, Travelokas, Yanoljas, Rakutens, and Expedias. “In Asia, car rental is now bigger than in 2019,” Fah said.
Live Music and Sports Rise in Importance
Klook handled ticketing for Taylor Swift’s exclusive Singapore performances. However, the company still has work to do to build out its capabilities to sell all types of live entertainment and sports, Fah acknowledged.
The technical and relationship-building challenges ahead highlight the need for continued investment and development in this area. Example: Concert tickets can involve demand surges on platforms and require complex software to handle seating.
“We have to build toward that,” Fah said. “We also have to build credibility with the promoters and artists’s management companies as well.”
Westerners Are Finding Klook
Without much advertising, Klook has seen booking growth from Western travelers coming to Asia. Examples: Selling E-SIMs for phone calls or portable Wi-Fi rentals.
Klook has been capitalizing on its regional supply relationships. “Americans visiting Japan have been finding us because we have the supply,” Fah said.
The trend suggests the potential for geographic expansion without heavy marketing spend if it can develop more organic brand awareness.
Klook Has Been Diversifying
The company has reduced its reliance on the Chinese market, with China now accounting for less than 10% of its business.
That said, China still matters. “We have four times the sales from China outbound as we did pre-pandemic even though overall China travel outbound remains below 2019 levels,” Fah said.
Klook’s diversification strategy could help stabilize long-term growth by providing resilience against regional economic and geopolitical fluctuations.
Financially Stable
“As a platform, the scale where we are today is pretty much at the break-even point, so, from a funding point of view, we don’t necessarily need more funding,” Fah said. “Now, that doesn’t mean we may not raise more money.”
The company’s openness to raising more capital suggests potential for further expansion or strategic investments. Analysts will watch to see if it acquires any smaller players to cement its strategy.
