Qunar sees loss in Q3

Qunar Cayman Islands Ltd, a Chinese search-based travel commerce platform, released its first financial report of the third quarter of 2013 on Wednesday after it went listed, indicating a loss of 48.8 million yuan ($8 million), almost 6 times more than the same period last year.

The total revenues for the third quarter of this year stood at 241.1 million yuan, 57.5 percent higher than the same period of last year. But the net loss was 48.8 million yuan, 5.8 times the loss in last year's third quarter of 8.4 million yuan, according to the financial report on NASDAQ.

The product development expense was 90.7 million yuan, 35.5 percent of the third quarter revenue, 75.3 percent up year-on-year while sales and marketing costs reached 108 million yuan, 44.2 percent of the revenue, an increase of 53.6 percent from last year, according to the report.

Ctrip.com International Ltd and eLong Inc, Qunar's competitors who are also listed on NASDAQ, reported different performances in the third quarter.

Ctrip.com gained a net profit of 373 million yuan for its third quarter, 92 percent up year-on-year, according to its third quarter report released on November 6.

ELong witnessed a loss of 50 million yuan, 52.3 percent higher than the same period last year, according to its third quarter report released on November 14.

Wei Changren, general manager of Jinlü Consulting, told the Global Times Wednesday that compared with its biggest two competitors, Qunar is still at an early stage and needs to win market share through making large investments.

Ctrip and eLong were both founded in 1999 while Qunar was founded in 2005.

Qunar is investing heavily in technology development on the mobile Internet, which is the future trend for online travel agencies, Wei said.

Qunar's mobile platform grew strongly, already accounting for 53 percent of hotel search queries, Sun Hanhui, chief financial officer of Qunar, said in the report, noting the company will keep investing aggressively in product development to catch the huge opportunities in the sector.

Qunar started to invest in mobile Internet in 2010 and usually products in tourism will not gain profits in the first four years of development, Sun said at a call conference after the report release, news portal sina.com reported Wednesday.

Mobile Internet business is quite different from that done on PC in terms of both operation model and customer habits, Zhang Yi, CEO of Guangzhou-based iiMedia Research Group, told the Global Times Wednesday, noting that creating a development plan for mobile Internet costs a lot.

In addition to investment in mobile Internet, Qunar has been trying to attract hotels, including independent hotels, into its direct sales plan since June, Wei said, noting that establishing cooperation with new hotels requires a high cost.

Qunar announced that it has cooperated with over 50,000 hotels for its new direct sales network, but its market share is still low and it is hard to compete with Ctrip and eLong in the hotel booking sector when the two have built up a base of loyal customers, according to a report of Jinlü Consulting released Wednesday.