This document discusses China's growing economy and the rise of an affluent middle class with increased disposable income and desire to travel. It notes that China has the world's largest online population at 618 million users, 45% of the total population. Baidu, China's largest search engine with over 556 million users, is looking to capitalize on this growing outbound tourism market through its Baidu Travel platform which sees over 212 million travel searches per month. Baidu Travel provides opportunities for non-Chinese brands to connect with and target affluent Chinese travellers online.

1. Baidu Travel & The Chinese Outbound Tourist

2. Content
China’s Economic Growth
China Online
Chinese Traveller
Baidu & Baidu Travel

3. Growing Wealth
CHINA’S ECONOMIC GROWTH

4. China’s Economic Status
• China’s total population of 1.35 billion is more than – US, UK, Japan,
Germany, Canada, Australia, Brazil, Russia and Indonesia combined
• By 2020, China’s urban population will be 842M vs. just over 1B for all the
above countries combined
• China’s urban population will grow from 42% of total population in 2005 to
61% in 2020, with more growth expected as developed nations average 83%
• China overtook Japan to become the 2nd largest economy in the world in
2010.
• In November 2012, the Chinese government set the goal of doubling China’s
GDP and per capita income of both urban and rural residents by 2020
Source: World Bank; retrieved April 2013
CCCP 2012; Economic Observer 2013

5. China’s Economic Rise
China’s economic growth over the past decade and a half has been remarkable. Today, it
is the world’s second largest economy and continues to enjoy a relatively high GDP
growth rate.
$1.20 $1.32 $1.45
$1.64
China’s GDP Growth, 2000 - 2012
$1.93
(Trillions; %)
$2.26
$2.71
$3.49
$4.52
$4.99
$5.93
$7.32
$8.23
8.40% 8.30%
9.10%
10.00% 10.10%
11.30%
12.70%
14.20%
9.60%
9.20%
10.40%
9.30%
7.80%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
GDP (current US$) GDP Growth (Annual %)
Source: World Bank

6. Growing Wealth in China
The middle classes are expanding beyond the larger cities more rapidly & in greater
numbers than any market has ever witnessed. The number of Middle and Affluent
Consumer HOUSEHOLDS in China will be the same as the US by 2020.
Urban household disposable income 2010 Urban household disposable income 2020
1
13
34
61
57
36
Households Millions Households Millions
12
53
69
66
39
23
Household annual disposable income
(USD) thousands
Upper affluent >$31.5
Lower affluent $16 - $31.5
Middle Class $9.5 - $16
Emerging Middle $6 - $9.5
Aspirant $4 - $6
Poor <$4
Source BGS Consultants

7. China’s Affluent Class
China’s Affluent Class in 2012: 120 million with purchasing power of
$590 billion
China’s Affluent Class in 2020: 280 million with purchasing power of
$3,100 billion (equivalent to 35% of China’s total consumption)
China’s Affluent Class will more than double in the next decade with
purchasing power increasing five-fold
Source: BCG, The Age of the Affluent, November 2012
Note: Affluent is defined as having annual household disposable income between $20,000 and $1,000,000.

8. Channels
CHINA ONLINE

9. The world’s largest online economy
China already has the largest online population in the world at 618 million users.
Astonishingly that’s only 45% of their population, so their capacity for growth is enormous
600
500
400
300
200
100
0
618
245
121
101
79
53
20
45
79
10.2
80
39
84 89
Online Population MMs
% of Population online

10. Or to put it another way…
China
Australia UK USA
= 50 million online users

11. China’s Digital Credentials
• As of end 2013, there were 618 million internet users in
China – the world’s biggest internet user population. The
internet penetration rate has now reached 45.7%.
• There are more male internet users in China (55.9%)
than female (44.1%).
• While nearly three quarters (73.4%) of China’s internet
users are going online via their PCs, more than two thirds
(69.3%) also do so from their mobile devices.
• China’s students represent 30.2% of China’s online
population.
• The rural areas of China account for 26.5% of the total
internet population, or 156 million internet users.
• As a guide, in recent years, China’s internet population
has grown by approximately 30 million people quarterly
(half the population of UK)
Total Population
1,351,000,000
51% Urban
Urban vs. Rural
Internet Users
618,000,000
45.7%
Internet Penetration
Mobile Subscribers
1,198,500
88.7%
Mobile Penetration
Baidu Users
556,000,000
90%
Internet Penetration
Source: US Census, CNNIC, Mobithinking, Baidu Metrics

12. Growing Wealth
CHINESE TRAVELLER

13. China’s International Travel Expenditure 2012
21.8
24.3
29.8
36.2
43.7
54.9
120.0
100.0
80.0
60.0
40.0
20.0
Increasing number of Chinese tourists traveling further
72.4
98.0
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
Chinese were the world’s biggest spending travellers in 2012 (over-taking the Germans)
Est. expenditure to reach $117.6 bn in 2013 with a year on year growth rate of 20%
0.00%
0.0
2005 2006 2007 2008 2009 2010 2011 2012
Y.O.Y Growth
Chinese Outbound Expenditure (in USD
billions)
Source: United Nations World Tourism Organisation, Baidu

14. Volume of Outbound Travellers
China Outbound Tourism 2000-2014 in million
border-crossings plus COTRI Forecasts 2014.
Sources: COTRI, CTA
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-
March
2014
Source: United Nations World Tourism Organisation, Baidu
10.5 12.1
16.6
20.2
28.9 31.0
34.5
41.5
45.8
47.5
57.4
70.3
83.2
97.3
112.0
26.4
2014
COTRI
est.
In 2013, Chinese outbound travellers reached 97.3 Million, with 14 million more
travellers than 2012. It was estimated to break 100 million in 2014.

15. Market Value Today
Chinese travel market is currently worth $232 billion
China’s travelers estimated to take 200 million trips annually by 2020
Chinese tourists spent an estimated $100 billion in 2012, up $27.6 Billion
from 2011
– Industry’s 17% annual growth over the next decade translates to… 10 million
‘first-time’ Chinese travellers every year for the next 10 years
– Or… 70,000 new Chinese travellers every day for the next 10 years
Source: HSBC 2013; UNWTO 2013

16. Why Target China?
800 Million Middle Class Chinese by 2030
• Rising incomes means more Chinese are
looking to travel
• Greater number of Chinese traveling, taking
more trips overall and traveling further
• Increased spending power means higher travel
expenditures
• Growth of online in China as a resource and tool
for travel seekers

17. Chinese Travelers to the UK
$600
$500
$400
$300
$200
$100
The typical visit from China generated £1,680, almost 3x from the average market.
London alone accounts for 44% of all Chinese visits and 47% of spend, making it the
most important UK city for the Chinese tourism market.
Source: VisitBritain.org
64
Chinese Inbound Visitors to the UK and Expenditure, 2003 – 2013
105 100 105
(000’s & GBP millions)
130
98
83
111
145
170
202
$125 $134 $127
$101
$149
$130
$109
$186
$245
$291
$493
$0
250
200
150
100
50
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Chinese Visitors to UK Chinese Visitor Expenditure

18. Defining Trends
Independent: 63% of China’s outbound now plan travel independently (up
10% from a year ago)
Sophisticated: no longer after the cheapest rooms, to reserve cash for
handbag shopping, the discerning inbound now seeks out quality
accommodation, and loyalty programs offering discounts
Experiential: Gen 1 shopping and Stonehenge, Gen 2 want meaningful
experience and are receptive to being marketed to in Mandarin, with
authenticity and passion
Online: All the time! Savvy marketers will provide content and next step
options at various stages of the travel cycle: from wish list to post-trip.
80% research online to make travel plans, 53% (and climbing rapidly) book
flights and hotels online, 91% use Social media during and post trip
Source: HSBC 2013; UNWTO 2013
Source: China Digital Review, Aug 2014

19. Influencing Channels
BEFORE TRAVELLING DURING TRAVELLING AFTER TRAVELLING
Sharing experiences
through social media is
popular, especially among
the younger Chinese. More
Chinese are writing about
their travel experiences
through personal blogs as
well as social media, either
during the trip or after the
trip.
Online sources are rated
as the most useful source
as travellers can obtain very
detailed and comprehensive
review and guidance from
other experienced travellers.
Chinese predominantly turn
to maps that they picked up
at the destination for
information. Other popular
sources of information
consulted are tour guides
and online sources via
either their mobile phones
or other electronic devices

20. Chinese Traveller Pre-arrival Research
For Chinese High Net Worth Individuals (HNWIs) in Tier 1, Tier 2 and Tier 3 cities,
the internet is the most popular source of information. Women prefer the internet
(71%) and magazines (45%)
65%
Internet
51%
Word of
Mouth
41%
Magazines
38%
Newspapers
37%
TV
Source: Huron Report Chinese Luxury Consumer Survey 2013
Women travelling abroad for the first time have between 2 to 30 items carefully
researched and prepared on their list
SILK CRM consumer insights interviewing luxury Chinese women shoppers

21. Influencers on Chinese Travellers
Chinese are traveling more independently rather than on tour groups, giving them the
flexibility to plan their own trip itinerary
• 60% of Chinese outbound tourists now prefer to travel individually
• 74% of individual travelers are between the age of 25-44
Source: Hotels.com, 2014

22. Usage of Different Travel Booking Channels
11.00%
15.70%
27.70%
27.00%
39.60%
35.50%
41.70%
46.50%
General Search Engine (e.g. Baidu / Google)
Vertical Search Engine (e.g. Qunar / Kayak)
OTA (e.g. elong / agoda)
Travel Channel or Portal
Travel Reviews Website (daodao / tripadvisor)
Credit Card Club
EDM
0% 10% 20% 30% 40% 50%
BBS
Source: Baidu, World Travel Mart

23. Online Travel Booking Market Scale
Millions Online travel booking users
30
36
42
112
120
100
80
60
40
20
0
2009 2010 2011 2012
Country Penetration Rate
United States 40%
United Kingdom 47%
India 20%
Brazil 25%
China 7.9%
• 2012 was the tipping point when
online travel booking spiked in
China
• By 2012, China had more online
travel booking users than the
United States (112 million).
• The current penetration rate is
only 7.9%, which indicates
growth opportunity ahead
Source: Baidu, World Travel Mart

24. UK Visa Status
Some 90% of Chinese tour groups omit UK from European tours, resulting
in £1.2bn lost revenue each year
UK losing out to France and Germany because we are not currently part of
the Schengen agreement
Source: HSBC 2013; UNWTO 2013
Source: Evening Standard, Sep 2014

25. China’s largest digital publisher
BAIDU

26. China Travel Search Users’ Intentions
9.4 Billion
monthly travel-related keyword searches on
Baidu

27. Baidu is China’s equivalent of Google…
Baidu is the major search engine, and largest digital publisher, in China with over 556
million regular users. That’s the equivalent of all the Google users in Europe and Asia
combined.
Population of China: 1.35 billion
Online Population: 618 million
Baidu’s Reach: 556 million

28. What can Baidu offer?
Awareness 知晓Familiarity 熟知Consideration 考虑Purchase 购买Loyalty 忠诚
• Content
Network
• Hong Media
• Targetisement
• Keyword Search (SEM) • Brand Zone
• Baidu Wireless
(mobile)
Brand Landmark

29. Search Network
Just like on other search platforms, Baidu don’t publish the exact algorithm that gets a
site the top advertising slot. We do know however that it’s a combination of quality score
and maximum keyword bid.
Baidu’s search results look very similar to Google’s.
The results at the top / centre of the page are “exact
matches” to the keyword that the Baidu user has typed
in.
Results below the red box are organic search results.
The red box on the right shows “broad matches” to the
keywords that the Baidu users typed in.
A brand’s position on the page is influenced by their CPC
(the highest bidder for the keyword appears at the top of
the page) and the website quality score.
The quality score refers to how relevant Baidu feels each
keyword is for your client’s website. If a keyword
appears many times in a website and meta data, it will
have a higher quality score.
If you’re the highest bidder but have a low quality score
for a given keyword, you won’t be given the top paid
search slot.

30. Brand Landmark
Using the keyword – Luxury Watches
Brand
Landmark
average CTR
2-3%

31. Brand Landmark
Californian Tourist Board

32. Brand Zone
This successful campaign from Burberry includes logos, videos, animated gifs, multiple
product photos, latest news, deep links and social media. (Translated from Chinese
using Google Translate)

33. Brand Zone – Desktop
Sands Cotai Central – Hotel Group, Macau

34. Brand Zone – Video & Knowlege
Sands Cotai Central – Hotel Group, Macau

35. Targeting Chinese Travellers
BAIDU TRAVEL

36. Baidu Travel

37. Baidu Travel
• 212 Million travel related search queries
exceeding 9 Million every month.
• travel.baidu.com was launched in 2011,
taking advantage of Baidu’s big data
resource
• Powerful platform for Chinese Travel
Enthusiasts
• From June 2014, Baidu Travel is available
to non Chinese brands to advertise on
• China Search International have rights to
sell Baidu Travel in the UK

38. Channels for Obtaining Information
If your customer is online in China, they’re on Baidu!
Source: CNNIC: Chinese traveler’s behavior 2012

39. Enormous Reach
97.2 Million
Chinese Outbound Travellers
66.0 Million
68% use Online Sources
42.4 Million
Baidu
20,000,000
Page views/day
Source: China Outbound Tourism Research Institution, 2014; UNWTC

40. Baidu Travel Channels
Baidu Travel has 7 Channels to influence audiences making travel decisions:
Homepage, Destination, Travel Note, Picture Album, Travel Plan, Shopping Mall, Promotion
BEFORE TRAVELLING DURING TRAVELLING AFTER TRAVELLING
Recommendation from
past visitor
Download Travel
Guidebook, Specialist
travel magazine or
newspaper
See downloaded PDF
Online guides
Tour Guide
Digital Maps
Write review on Baidu
Travel
Blog about it
Post on social
networking site
Share photo

41. Baidu Travel - Positioning
Best Trip Advisor Active Travel
“Unbiased destination reviews,
photos and travel advices for
trips and vacations”
“High quality content generated
by travel professionals.
Venturing Somewhere New?
Be Inspired By Baidu Travel!”
“See suggestions &
recommended sights with
pictures posted by past
travellers. And share your own
travel experience!”
Professional
Generated Content
Social Media

42. Baidu Travel - Positioning
Suggested Schedule
Place of interest
Food & Hotel
Transportation
Activity & Festival
Q&A + Tips

43. Baidu Travel - Mobile
• As of May 2014, the number of downloads via
mobile devices exceeded 40 Million.
• Time spent on Baidu Travel app made up 30%
of total time spent on Baidu Travel services
(PC+App)
• The monthly unique visitors of Baidu Travel
app reached approximately 6 Million in Apr.
6,000,000+
Unique Visitors
1,100,000+
Active Visitors

44. User Demographics
Domestic travel users
on avg. have travelled
4.7 times in the last 12
months
Outbound travel users
on avg. have travelled
5.4 times in the last 12
months
9,447 RMB average
expenditure in each trip
Affluent
Young
Elite
60% plan to make at least 1
intl. trip in the next 12
months
58% claim to be fluent or
proficient in English
62.5% owns a bachelor
degree and above
Well
Traveled
Monthly Personal Income
8,114 RMB
Monthly credit card
consumption is almost twice
as much as the general
online users’
The average car ownership
for existing users is 1.4, the
average price is 230
thousand RMB

45. Baidu Travel
Banner
Standard
display
Impactful
display
Interactive
Campaign
Theme
Package
Q&A
Activity
Destination Package
Destination Official
Experience Pavilion
Mobile
APP Development
and Maintenance
BRAND
DIRECT
RESPONSE

46. Banner Options
Baidu Travel offers a variety of banner placements including Standard Display
and Impactful Display:
Homepage Travel Plan
Shopping Mall
Picture Album
Promotion
Travel Note Detail Page
Destination Details Page

47. Destination Package
Special designed page
for introduction of
destination
Banner Promotion
For Q&A Activity

48. Baidu Travel
In the UK access to advertising opportunities is only available from me!
Baidu Travel advertising is not available in China
Popular with travel and tourism brands for planning and sharing activity pre-
, during and post-trip
Also popular with retail brands (at destination) e.g. products-in-store brands,
retail outlets, and shopping destinations.

49. China Search International
Overview
We are Baidu’s International Partner, not an agency.
That means our business model does not rely on
charging management fees.
In fact – the only charge you or your clients will ever see
from us is a 2.5% processing fee to cover our banking
and foreign exchange fees. In essence we are paid by
Baidu to sell Baidu.
With offices in Singapore, San Francisco, Sydney and
London we’ve guided hundred of clients through the
complex Baidu processes.
We’ve all worked previously at major brands / agencies
in the UK, USA and Australia so we understand your
requirements and the importance of managing your
client’s expectations.
The result is that we’re well placed to help your clients
launch on Baidu in the most cost effective and hassle
free way.
Some of our clients

50. Thank you
Matt Brown
UK Sales & Marketing Director
Direct: 020 7193 8753
Mobile: 07900 692149
Email: matt.b@chinasearchint.com
Web: www.ChinaSearchInt.com