By Anita Devasahayam
The founder of Asia's hottest travel aggregators,
Asiatravelmart.com, knows what it takes to give vacationers a
fun-packed, pleasurable experience.
From the age of 14,
entrepreneur-to-be Alex Kong was already playing tour guide, leading
various tour groups mountain-climbing, shooting the rapids and
exploring dark caves in rainforest-clad Borneo.
"We had German tourists fly in direct from Munich just to trek up
to Mulu Caves in Sarawak," recalls Kong fondly, who led these tours
when in the employ of his family-run travel agency.
Today, Kong is participating in an e-commerce sector which could
someday make his family Net business obsolete. After all, he notes,
some travel agents are already making the bold but scary move to let
go of their entire offline business. "Well, we have to accept that
moving forward we may have to lose some, in order to gain some. All
agencies may have to make the judgement call," he says. " At this
point, I don't think anyone has the right or wrong answer. But the
clock is definitely ticking."
Tech, travel interests converge
Kong, 30, grew up in Sarawak,
a popular destination that houses the world's oldest rainforests and
some of the largest caverns, and over 20 indigenous tribes still
retaining their cultural heritage and lifestyles.
Personable and chatty, Kong's demeanor is reflective of his early
training in an industry where charm and wit go a long way in winning
and retaining customers.
As an early Internet subscriber to Compuserve and Prodigy in
1991, Kong was led down the path to his other love -- technology. "I
always enjoyed technology. Even though I have never attended formal
computer classes before, I used to buy and read up a lot of IT
magazines, " he said.
Kong relates that the idea to merge his two loves -- technology
and travel -- was already germinating when he was an undergraduate
studying travel management in Hawaii. That dream was finally
realized in 1998 with the conceptualization of
"When we started we reckoned that the aggregator model was the
right approach because no travel agency is complete by itself. Under
one umbrella site, we have a much higher chance of succeeding
without the risk of being swallowed up by another big company," he
Convinced of the model, Kong sold off earlier businesses and
raised US$440,000 in seed money, then turned to Asia Tech Ventures
for another US$185,000 worth of venture funds to kick off his dotcom
Asiatravelmart.com was built from ground up as a one-stop online
travel shop offering flight tickets, hotel rooms, tour packages,
transfers, car rentals, meals and lots more.
In its first year, with little marketing, the company generated
US$1.84 million in revenues on a 120 per cent month-on-month sales
growth. In 2000, the company is projecting a spike in revenues
upwards of US$65 million. Asiatravelmart.com makes money on an eight
per cent commission it charges for the 110,000 travel product
offerings it hosts.
Kong said that Asiatravelmart.com benefited from first-mover
advantage in Asia and was able to scale up and expand even before
the US-centric sites considered expansion.
The main draw of the site is its travel reservation engine that
allows users to get instant confirmation, print out their own
receipts and vouchers to redeem their travel services, and the
ability to process and provide immediate online refunds in case of
Kong's charm and standing in the industry also led to deals with
3,000 suppliers in over 100 countries and over 7,000 partners to
join the site's ePartner program, ranging from travel agents,
hoteliers and car rental service sites.
The ePartner program links Asiatravelmart.com's online travel
reservation services and booking engine to any existing website or
personal homepage. It counts among them well-known brands
LycosAsia.com, Travel.com.au, GlobalSources.com, Netvigator.com,
Click2Asia.com and MSN.com's country-specific sites in Malaysia,
Singapore and Hong Kong.
Kong admits that when it first started out, convincing suppliers
proved problematic. "Many have woken up since and realized that the
Net is a good avenue to reach customers that they would not be able
to reach otherwise."
He baited travel agents by providing the brick-to-clicks
transition know-how that helped them halve their transaction cost.
"The key was in the end-to-end solutions we provided that could move
us all to the next level. We can expand the business without
comprising the costs on the supplier side. Everyone gains," he
Spreading its wings
Having conquered Asia, the ambitious Kong is now readying the
company to spread its wings to Europe and United States.
The company has secured US$14 million in three rounds of venture
capital funds. Its most recent round garnered US$10 million from
high-profile names such as Merrill Lynch Direct Investment Group,
Citicorp Capital Asia Ltd, the Asia Java Fund and AsiaTech
"Now we can take on the big guys like Travelocity and Expedia,"
says Kong who hints he will ink significant deals in Europe and U.S.
over the next two months.
Kong believes breaking into the European and American markets
will be easier. "In Asia, we still had to spend time and money
educating the user. That was the biggest challenge. The mature
markets in the online transaction culture should be easier, as long
as we have better products and pricing."
Kong said the company's greatest strengths are its
in-house-developed infrastructure, coupled with a deep understanding
of the context of the travel industry.
"The other players don't own the infrastructure and their sites
are built on legacy systems. In a way, they are like resellers,
re-branding and marketing the systems and service and spending big
bucks on advertising to create the brand. They are still in the
travel agent-based model, going all out to destroy everybody. Our
model is the marketplace model. We are like an exchange and do not
compete with the people within the industry," he said.
Kong's entire development work is done with a team of 39
technical people, all the better and quicker to roll-out new
solutions at Internet speed.
"Our wireless application was rolled out in six weeks, of which
two was spent on developing the application by a single person.
People were amazed that we could do it in such a short time. We are
the world's first transactional WAP engine in the travel industry
that allows consumers to book, pay and cancel bookings," he
Kong said to-date the company has spent about US$3.7 million on
its infrastructure costs. He concedes that funding is limited and
that maintaining a business as an aggregator is a high-cost
operation, with continual demands to raise fresh funding. "We have
to think harder on how to leverage and stretch the investment dollar
very far - maybe 10 times further than the competition."
Partnering for promotions
Unlike other dotcoms, Asiatravelmart.com spends little on
advertising and rides on the promotional power of its ePartners.
Plans are underway to roll out a real-time management system to
allow all the travel agents and suppliers to manage and process
bookings and orders that come through Asiatravelmart.com's system.
"In effect we become an exchange like a telephone switchboard
routing calls to the right persons," says Kong.
Together with investor partner Hong Kong-based Shun Tak Holdings,
the site will also be available in simplified Chinese, Spanish,
Portuguese and Japanese, by December.
"We are looking at strategic partnerships to support different
language sites in Europe and India," said Kong.
This month, Kong will attend the industry's second largest travel
trade event World Travel Mart in London and expects to seal a few
major deals with European travel consortiums. He refused to divulge
the details of the deals apart from mentioning that it may increase
the number of ePartners by a whopping 34,000. The company will also
sign a second major partnership in the US soon.
Kong expects Asiatravelmart.com to break even by the end-2001. An
initial public offering is also on the cards in an Asian bourse by
mid-2001 at the earliest, depending on market sentiments.
ABOUT THE AUTHOR
Anita Devasahayam is a Kuala Lumpur, Malaysia
based business and technology writer.
this article to a