In August, ‘Waug Travel,’ a Seoul-based travel activity booking platform, announced its $2.5M series-B funding from ‘Global Tax Free (GTF)’, a global tax refund company. It is worth noting that this investment is an expansion of the offline marketing channel to attract foreign visitors to Korea.
Domestic activity booking platform apps rely heavily on sales, and users are mostly Koreans. As competition among domestic players gets fiercer, players are seeking to widen the customer base by expanding the sales channel to offline, as foreigners do not use Korean apps due to the language barrier, in addition to low brand awareness.
GTF has over 100 tax refund kiosks located at major attractions in Korea, and 10,000 affiliates in Korea. GTF plans to adopt Waug’s voucher ticketing technology to enable travelers to book activities at kiosks. Because foreign travelers frequently visit tax refund kiosks, which mostly locate near tourism activity sites, GTF saw an activity booking platform as a good investment strategy.
Inbound demand in the Korean travel industry has been growing significantly. According to ‘Korea Travel Industry Report’ distributed by Korea Association of Travel Agents (KATA), the number of foreign travelers to Korea increased by 30.3% from 2015 to 2016. The trend carried on to 2017 with 3.2% QoQ growth in the first quarter.
In expanding its target customers as foreigners, Waug’s partnership with GTF is a strategic move as both companies share the common vision of expanding its customer base globally.
Although online-to-offline may seem contrary to the recent trend, expanding offline channels in major attractions is a way of creating a new competitive advantage and enabling foreigners to experience Korea’s regional unique activities. Fierce competition could imply a possible price war. However, in the context of Korean tourism market, this competition incentivizes major players to find more creative ways to capture new customer base, and to introduce Korea’s local activities to foreigners.
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