Tapping into Billion Connect’s differentiated, SIM Card-driven approach in mapping China’s outbound travel market

Coming soon

The Moodie Davitt Report is soon launching a series of unique proprietary reports in association with Billion Connect, the China-based world’s largest mobile operator for the outbound traveller, driven by the exponential growth of its SIM card business.

The first report is complimentary (by request) to The Moodie Davitt Report readers. Please email The Moodie Davitt Report Senior Retail and Commercial Analyst Min Yong Jung, head of Moodie Davitt Business Intelligence Unit at minyong@moodiedavittreport.com for details and the full annual report.

Billion Connect, the world’s largest travel SIM card provider, has released unique insights derived from its core business of selling SIM cards to outbound Chinese travellers in a new annual report available exclusively through the Moodie Davitt Report. Min Yong Jung reports.

The Chinese company sold over 12.1 million SIM cards in 2019, up 150% year-on-year. Since January 2017, Billion Connect has attracted over 62 million registered users with a daily active usage of more than 910,000 users.

Despite the widespread impact of COVID-19, Billion Connect CEO Antonio Xu remains upbeat on the prospects for a strong recovery in the outbound Chinese travel market. The sector has traditionally shown great capacity to bounce back and early indications hint at the beginning of a recovery (at least in the important daigou sector).

Heat map of data usage by Billion Connect users around the world

A global heap map of data usage by Billion Connect users shows similar trends of outbound Chinese travellers. According to Billion Connect, the top destinations for Chinese outbound travellers in 2019 were Japan, South Korea, Taipei, Hong Kong (China) and Vietnam.

Utilising global network services, real-time geolocation tracking, SMS and mobile app pop-ups, Billion Connect has the unique ability to communicate with its customers during their travels in real time. Billion’s special ability allows them to create a heat map of the most-visited destinations by city. A heat map of Chinese visitors below illustrates vividly why stores down south in Seoul’s Gangnam District pale in business compared to stores in the bustling Gangbuk District. The Annual Report attached and available by subscription to The Moodie Davitt Report exclusively, contains heat maps of Chinese travellers in Seoul, Tokyo and Singapore.

Heatmap of Chinese travellers in Seoul, South Korea

Billion Connect has monitored data usage and trip cancellations since the outbreak of the coronavirus in China. While business in China is normalising with new confirmed cases slowing considerably, 88% of Billion Connect’s users cancelled their trip in February and only 12% of users were active.

(Source: Billion Connect)

The 2019 Billion Connect Annual report provides important and detailed findings on the profile of Chinese outbound travelers – 52.4% were women; 28% were born in the 90s (between 25-30 years old); based in second-tier developed cities 44%; educated with bachelor’s degree 48%; married 50%, indicated food-related activities were most important for travel preference 45.5%; and preferred short-haul travel during minor vacations (e.g. May Day, Dragon Boat Festival and Mid-Autumn Festival) 27.9%.

(Source: Billion Connect)

Key trends in Chinese outbound travel in 2019, identified by Billion Connect’s users, saw an explosive increase in long-distance travel. Six of the top 10 tourism hotspots that saw the highest growth rate in 2019 were European countries – Montenegro, Bosnia and Herzegovina, Russia, Serbia, Italy and Croatia.

(Source: Billion Connect)

Highest growth for China, the world’s largest and important source market, came from new first-tier cities. The importance of these growing cities in China is increasing as the growth rate of Chinese outbound tourism declines. Billion Connect emphasises that the following base of Chinese travellers are showing immense market potential.

(Source: Billion Connect)

By destination, South Korea ranked first in terms of average daily network usage with 680MB per day – no doubt boosted by resellers (who constitute a major portion of Billion Connect’s user base) who must send over videos and photos from the largest duty free market in the world to their customers back in China. Japan, USA and Europe showed high data use between 440MB and 480MB. The availability of high-speed networks is also an important factor in data usage by Chinese travellers.

(Source: Billion Connect)

Average stay per trip by destination was highest for Europe (12 days) and the US at 10 days compared to 7 days in Japan and 6 days in South Korea. Billion Connect reports that the distance travelled is an important factor in deciding average stay by destination.

(Source: Billion Connect)

Interview: How Billion Connect is creating a value-enhancing link between SIM card business and travel retail

Chinese company Billion Connect describes itself as the world’s largest mobile operator for the outbound traveller, driven by the exponential growth of its SIM card business. Now, with advances in technology and location tracking, the company is turning its attention to the travel retail market and how it can help stakeholders in the industry engage more with consumers and win more business. Martin Moodie investigates the big potential for travel retailers and brands in conversation with CEO Antonio Xu.

Billion Connect, the world’s largest travel SIM card provider, has pioneered the APP+SIM Card connectivity model to provide a global data and telephony service for global outbound travellers. In the process, it is opening up what it believes to be revolutionary promotional opportunities for travel retailers and brands.

Initially tailored for the growing Chinese traveller market – responsible for 162 million outbound tourists in 2018, a +13.5% year-on-year increase – Billion Connect distributes in China and 24 more countries, providing data services covering over 150 markets.

Billion Connect CEO Antonio Xu, pictured with The Moodie Davitt Report Chairman Martin Moodie during a recent interview, says: “We know where our users are at any particular time and we want to influence what they are doing next. So the next thing we are going to do is to let them know where to buy, where to eat, and where to play.”

In 2018, it sold more than five million SIM cards, with an annual growth of +340%. It estimates a +300% year-on-year rise in 2019, with a sales target of 12 million SIM cards. Since January 2017, Billion Connect claims to have attracted over 58 million registered users with a daily active usage of more than 900,000.

Its SoftSIM technology allows users to buy and use data globally with one card. This is complemented by portable wifi services, mobile virtual SIMs and the Billion Connect app, which is currently translated into ten languages.

Through global network services, real-time track user location base and through push, SMS, screen pop-up and other techniques, it can feed merchant information to users based on their location during a trip. That has important implications for travel retailers, Early customers include King Power International, Thailand’s premier travel retailer, and South Korea’s fast-rising Shinsegae Duty Free.

Billion Connect CEO Antonio Xu tells The Moodie Davitt Report: “The number of travellers keeps on increasing at a phenomenal rate. Mobile phone use on the move has become critical for travellers. The first requirement for them is travel data. Everyone needs to have a solution to access a foreign network when they are abroad.

“The Chinese market is leading the trend in outbound business, and the travel SIM card has become very popular in the whole of Asia.”

Xu has negotiated sponsorship deals with the likes of mobile payment provider Alipay and Air China to appear on co-branded point of sale SIM cards. He predicts that travel SIM cards will eventually replace the roaming services of mobile phone network providers in many countries, including the US, owing to their ease of use.

To illustrate the scale of overseas SIM card use, Xu reveals that SIMs already hold about 37% of the market, which is rounded out by 26% using portable wifi and 30-36% using roaming services.

“The travel SIM card provides the data for the users and the mobile application allows you to top up the same card,’’ he continues. “You can buy the package for a certain country for a certain period for the card and the mobile application can handle your phone call. This year we are about to sell about 12 million travel SIM cards globally.”

The cards are sold online, through travel agents and at airports.

Retailer benefits

Xu explains the advantages for retailers. “Our SIM card is becoming a very important entry point for ecommerce because we can touch users at any time during their journey and give them the opportunity to buy items online.”

He adds: “We see ourselves as an internet company. We are not just about making money from selling the data, we want to use this to grow our business and engage users. Our strategy is letting people go to some place and do their shopping; to go somewhere and play; and/or go to some restaurant to eat. We’re leading people to that. We are generating commercial income from client brands and duty free stores, for example.”

Xu says the business model and long-term aim of Billion Connect is to allow users to operate SIM cards for free. This would be paid for by making money from leading them to a retailer or brand and receiving a commission in return.

There are imminent developments in terms of ease of use, Xu says. “Currently, people are still seeing it is a little bit difficult to change the card. In the future, beginning from this year, most people will just quickly scan into our code and download the number into the phone to use that phone abroad.

“We know where our users are at any particular time and we want to influence what they are doing next. So the next thing we are going to do is to let them know where to buy, where to eat, and where to play. Currently we’re working with some big retailers on this, including King Power.”

“We are very new to the travel retail industry, but… we serve similar users – the travellers. So the potential for cross-over is huge.”

He continues: “Using this example, when the user comes close to a King Power duty free store, within just two kilometres or one kilometre, we can send them more messages, letting the user know what King Power can offer them, what discount they can enjoy and what the marketing or promotion deal is. So we can lead the person to the King Power store or other store. And on average, we estimate our conversion rate is about 12.5%.”

This is where things really get interesting for travel retailers and brands. Xu claims that this 12.5% figure is more than ten times the conversion rate of competitor platforms.

On the subject of Business Connect connecting more closely with the travel retail environment, Xu concludes: “I suppose we are very new to the travel retail industry, but although in many ways we are like mobile operators, we serve similar users: the travellers. So the potential for cross-over is huge.”

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