Q&A: Klook on taking risks, collaboration and new trends

It has been nearly two years since the outbreak of COVID-19 in China, followed by rapid spread throughout Asia Pacific and then the rest of the world.

For Hong Kong-based Klook, with a customer profile of mostly Asia-based users, the crisis has become a lesson in resilience and innovation. With international travel at a standstill, the tour and activities online travel agency shifted its focus to products and services for domestic travelers as well as digital solutions to support its merchants. 

In January, Klook raised $200 million in Series E funding, and the company says its revenue in some markets is now higher than it was pre-COVID. 

As the company this month marks seven years since its launch, PhocusWire talked to chief commercial officer Wilfred Fan about the key drivers of Klook’s recovery, the importance of its live video service, what he thinks about the recent GetYourGuide-Expedia deal and why – in the absence of meaningful user data – it is necessary to be “brave.” The conversation has been edited for brevity.

I understand that Klook has been operating from the mindset that data-driven methods are now less effective, given that any data was pre-pandemic and not contextual to the current environment. Can you explain how this has impacted your strategies? 

In recent years, when we use data ... it is really an optimization process. In the past year and a half where everything is being reshuffled, you are starting from zero or a very low base of information. We decided to take a bit more risk in what we do - starting a lot of projects from zero, launching new initiatives and new activities in the market. ... We were one of the first to provide some virtual experiences to the customers to test the appetite of these kind of services. There was no data, so we would quickly do an assessment of the market... and quickly launch something, test it.

But after we roll things out, we still have a very, very intense look into the data [about] how are things doing - the e-commerce metrics on conversions, click-through rates, attachment rates and all those numbers. 

Can you share an example of something risky you've tried?

In some markets like Hong Kong and Southeast Asia we are selling mooncakes, for example, selling a commodity on a travel platform – that is unheard of. But it is seasonal and is what people are looking for. ... It’s not a windfall of revenue, but it helps us to keep engaging with the customers through these kinds of wild ideas and things that we are willing to try. So we have mooncakes, we have different specialty drinks in some markets, we have virtual tours like I mentioned earlier and a bunch of other things.

Some picked up and became successful and some were kind of an interest grab, an attention grab and didn’t materialize into a real, scalable business. But that’s okay. This is the time that we need to be brave and keep trying. 

How has Klook had to adapt to the lack of international travel?

We used to look at the world in what we call O-D pairs, the origin-destination pair, and understand behavior of each of them. But now it is mostly domestic... so we take away that layer of analytics and focus really on how people respond to the content we provide. We are still spending a lot of time in localizing, optimizing the content for domestic consumption, which is pretty hard because we operate in very diverse markets.

If you look at most of the international websites, you will see that there are certain elements of the platform or the user interface that are always there. For example, a search box in the middle, and there are very little other options to navigate through a website or through an OTA app. But for us, whether it's app or web, you will see many different ways to navigate through search. We also have a lot of recommendations, highlights, features, pop-ups, drop-down menus. And deciding where we place it, how we mix things around, do we embed some of them just on the homepage or into the content, even onto our social media content - it really requires a lot more work than what was probably a simpler way before COVID.

In addition to impacting your content and user experiences efforts, has the lack of international business affected your work with merchants? 

Yes absolutely. For example, if you are an experienced service provider and you sell an Eiffel Tower tour to all the inbound visitors, you have one product and it fits a large amount of tourists, regardless of the background. But the French are not necessarily keen to do that. ... Domestic travelers are looking into more local experiences. They might want to go to explore some winery and find some rare vintage, as opposed to just going to the famous attractions and taking photos.

For us, we have to find those interests. We also have to work with tour operators and merchants to fine-tune their services to make changes to the itineraries, so instead of a three-hour trip somewhere to take a few photos, which domestic tourists have no interest whatsoever... to add more elements, maybe create more entertainment along the way. That’s something they cannot do by themselves.

Last week the big news in the tours and activities sector was the partnership between GetYourGuide and Expedia. What are your thoughts on that and would Klook pursue a similar strategy? 

Actually I'm not surprised at all when I saw the news. Even well before this announcement, there have been acquisitions and partnerships that have developed over time - the Musement-TUI relationship and years ago Booking.com acquired FareHarbor. I feel that the timing is interesting... when Europe and U.S. travel is becoming a higher possibility, with high vaccination rates and probably there is a stronger demand and strong need to capture this opportunity and thus really push for the closing of the negotiation and launch this partnership. But I'm pretty sure they have been talking to each other for years.

And likewise, we are talking to all the players, either as a supplier of services to other partners, or also as acquirer of services from all these different type of SaaS platforms or channel management systems. We don't rule out any type of partnership. If Expedia wanted to work with us, that's definitely something that is on the table as well.

What we believe in is non-exclusivity. It doesn't really do any good to us, to our consumers and also the merchants if you just take sides and say, "I want to go exclusive with one or the other." It’s an open world. Technology is really readily available in terms of APIs, content feed and all that. 

But do broader distribution strategies like this start to dilute the ability of a company like Klook to differentiate its brand? 

The vast majority of our business is direct-to-consumer. We do have some partnerships, especially in Asia, with companies like Grab, Uber, a lot of the Chinese e-commerce platforms like Alibaba and the like. But when customers book, they still know that they're booking with Klook. We are not a platform that allows anyone to register and try to sell something. We are much more curated.

For every particular service, we have a designated seller of the service that we work very closely in fine-tuning the delivery, in fine-tuning the content, in fine-tuning the price point, the inventory level. And we work into a lot of details on how things are being delivered to the customer, not just at the reservation level, but also when people are on the road or during the trip, how they consume that experience and the feedback.

Live video content is going to be quite substantial... the process, the capability is something that we want to train ourselves and build up the talents and the know-how.

Wilfred Fan - Klook

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So for a single service type, for example, a tour to the Great Wall of China, we have a single type of service for a specific itinerary from a specific provider. You won’t see 10 different providers and everyone telling you that they’re best. We already do the screening. We feel that's the value-add to a consumer when it comes to using Klook as a brand that we deliver, and we have the service and the price guarantee and also a lot of post-reservation support. I think that is quite significant to the consumer. And one more thing is without that, if you look at a model like Tripadvisor or Viator, they have a very, very large listing of things globally. If you just talk about overall listings, they are probably the champion of the world. But in terms of the usability I think there's a big difference between what we do and what they do.

GetYourGuide also offers branded tours – does that interest Klook?

The way we invest time in working with operators to curate and improve on their services and products, in a way booking with Klook is already a good reference and somewhat of a branding. But to brand a specific service as a Klook product or Klook experience, I don't think it really makes a difference. Also it's not great for the operator... and for the consumer, you are restricting choices as a platform.

Not saying that we'll never try, but I just don't see the true value to all the different partners in the industry.

Last fall Klook launched Klook Live – giving your users a chance to interact with brands and get special offers through livestreaming. Can you give us an update on what's happening with that? 

We have been running that in quite a few Asian markets, in Taiwan, in Singapore and Hong Kong. It's not an everyday live feed - some of them are doing it once a week, some of them are doing once a month. But it’s an opportunity for us to test and improve our capability to produce live content, to engage with the customers, to learn about the tricks, how it works with the partners, with the consumers and how we engage them and what type offers and information is attractive to them. And how do we promote it?

This is just to build our capability to do live video content communication with the customer because early on we understand that the traditional communication with consumers is going to change so much. Live video content is going to be quite substantial... it is there to stay. We don't know what platform is going to be the biggest one down the road. It might be one of those that we have seen right now, or it could be completely new in the next couple of years. But the process, the capability is something that we want to train ourselves and build up the talents and the know-how. So no matter what brand and platform that comes about, as long as it's live-video-related, we can be very good at it. And hopefully post-COVID it will be a big thing for us.

In addition to Klook Live, are you doing anything else new to engage your audience?

We are optimizing our platforms. During COVID we spent a lot of time looking inward to our existing user interface and made some pretty significant changes. We changed the homepage of our website twice in the last 18 months. We revamped the search function of our site. It’s not just a pure word search, we now have a lot of tabs and buttons after you type in the search, then it has a ton of recommendations. If you search for California, we will also show you San Francisco and Los Angeles as clickable links right away. Those kind of changes really made a big difference to our overall platform conversion and usability.

We also tested something more unique - again taking a bit more risk in what we do in a couple markets. It is called a group coin game. For people who sign up for this game, after one booking at a minimum value, they would get a letter K. And then once they all the five letters – K-L-O-O-K, then they would draw a prize... [like] a free staycation at a top resort. It’s gamification, making it a bit more fun and giving more than we get from the consumer and seeing how they will respond to it.

Klook recently integrated with Google Things to Do. What else are you doing to help your merchants manage their storefronts and operating their channels?

First, Google Things to Do is really encouraging because it showcases to our merchant and operator partners in Asia that there is a very easy way to work with Google via Klook. It doesn't cost them anything... and we really encourage it because it helps us to create a bit more value for the merchants and becoming a more important partner to them. I don't see it as a financial situation. Of course, there are transactions to be made, but ultimately it is to make the merchant understand that working with Klook is not just selling on our own website and our platform.

We also have a white-label solution that all the merchants can apply for. It’s a template that they can use to promote their own service. They can use our domain or they can tell us what domain they want to use, and we will customize it for them or, it can also be a hot link or a booking button that they can apply to the existing website to complete a transaction. So those with limited capability to transact online can just work through us and then we can help them to fulfill the transactions. 

Again, a lot of the B2B services we offer, we don't offer at any cost or fee. We don't see that as potential revenue generation opportunity, but it's our view of really investing in the supply chain as best we could. So ultimately the customer gets the best experience. That’s the foundation of our model.

Looking ahead, what are some of Klook’s priorities for the future?

We have really turned a corner in places like Hong Kong, Singapore and Taiwan that our revenue is beyond the pre-COVID time. That is really encouraging.

What we are doing right now is to understand how the customer engagement with Klook has changed. It used to be a brand they go to or an app they download when they are traveling abroad. Now they're using it at home more frequently. So we have high engagement with the consumer and also a different brand engagement and perspective - what can we do with that? That's what we are looking at and investing in, as in more transportation options... like more car rental services, delivery of car rentals in some markets. Mobility and transportation is something that we had before, but mostly with tourists as in transfers, trains, private charters. But we want to see how to go a little beyond that [to] fulfill the need of the domestic traveler when it comes to transportation.

We have launched already in Taiwan high-speed rail domestically. With us, it becomes a mobile experience. That’s why it's becoming popular. And there are still more things like that we can do in each of the countries we operate in. That's what we are spending a lot of time to investigate and build.

The other thing is... how to integrate even more with the attractions... the large venues, some of the popular museums and how to integrate better with them. How do we become the extended marketing for those partners, that if they want to promote a brand on, say, TikTok, how do we put together a very good solution that doesn't take them a lot of work? They don't need to hire an agency, just work with us and then the brand will be front and center of the audience.