Building modules for the travel ecosystem

Abel Zhao, FreeD Group’s co-founder and CEO, aims to further revolutionise and enhance the digitalisation process of the TMC industry, which began recently with the acquisition of Connexus Travel

Is Connexus your first travel company acquisition? Why did FreeD choose it?
To provide some background, our core product is the SaaS hybrid marketplace, or merchandising console solution, with a touch of digital transformation. We focus on Customer Value Management, and the marketplace solution we developed comprises e-commerce capability, loyalty points, a payment gateway, and data processing.

Connexus is actually our second acquisition in the travel sector, but the first TMC. The first travel acquisition back in 2016 was another leisure travel agency called Awakening Journey, which targets domestic travel within China.

There were several angles we looked at when considering an acquisition. First was whether there was a synergy; how much we can do for this particular company based on what we have. We also look at their product, and see what can benefit us as well.

Connexus is trusted by many corporations, and is a service provider with a supply chain already in place, but it still had a very traditional operating method. Our solution aims to enhance their day-to-day operations by using data and technology.

You didn’t have to acquire a company to sell them a solution though. Why not just sell Connexus a solution?
We find that if you partner with a client, there are a lot of things to accommodate on both sides. But if we wanted to show the market what FreeD as a tech company can do for a traditional company like Connexus, the best way was to acquire it, and completely transform it.

This way, we maximise the value proposition we can bring to the market, and show other TMCs what we can do for them.

As to whether we want to acquire another TMC, we don’t have to, that’s not our business model. We are just focusing on Connexus at the moment.

How does FreeD plan to transform Connexus from a traditional travel agency to a travel tech enterprise?
First of all, for a typical TMC, companies still use the traditional way of communicating with their customers. Just this morning, I had two clients in Connexus who had to designate their secretaries to call Connexus to book a flight and change a flight (respectively). We want to help to make this process more efficient.

For example, if I want to change my flight timing due to a postponed meeting, instead of picking up the phone to call my secretary in Hong Kong, I can go to my TMC app and simply put in a request change, which the system will modify automatically.

There are also other things that are part of corporate travel, such as employee services. Some TMCs just focus on two things, flights and hotels, but frequent travellers will need more than just that. Say, if I wanted to arrange for a dinner with a client, do I have to call the restaurant myself or ask the hotel concierge? These are the things that can be solved or improved with technology.

How soon will FreeD be able to deliver this product?
We have already started on the components, and we are in the final testing stage. We are planning to deliver these components to Connexus in phases, with the first phase to come in mid-2023.

Also, our main markets for the time being are Hong Kong and China, with plans to expand to other markets such as Japan, South Korea, Singapore and Dubai; these are destinations with existing FreeD offices.

Our long-term goal is to bring this solution to the rest of the travel ecosystem.

How does this solution support other verticals in the travel ecosystem? What other travel clients are you partnering with?
We have clients and partners in a wide range of verticals ranging from hotels and airlines to airports and tourism boards. There are several things FreeD can help them achieve – to generate incremental revenue, and improve their customer engagement and improve their capability in understanding their customers’ behaviour.

As a SaaS, we have a range of solutions – think of it as modules sitting on the backend system – that cover different functions and purposes. Some of these are fundamental, while some add extra value depending on the type of solution needed. When we engage with a customer, we would assemble these different modules together based on their requirements and tailor-make a solution for them.

Say, for example, a TMC requires five modules in its basic framework to fulfil all of its functions. These five modules will then act as a foundation. Say a potential TMC customer might require more services, we will pull another module from our pool of solutions and attach it to the framework, assembling it like a puzzle and enabling this particular solution to cover more functionalities, be it for the staff or clients.

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