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"G2 strategy" has also been proposed at the 20th anniversary celebration of Ctrip, Ctrip will speed up the process of Globalization
"In three years, Ctrip will be the first in Asia, the first in the world in five years, and the most respected and undisputed enterprise in 10 years."
At the 20th anniversary celebration of Ctrip, Liang Jianzhang, the founder, designed such a "Coronation" road. "G2 strategy" has also been proposed, and high quality and globalization have become the strategic path of Ctrip's next journey.
If it wants to be the No. 1 in the world, it is clear that Ctrip is not only China's Ctrip. Ctrip changed its English name to trip.com, which shows its global ambitions.
The second quarter financial report of Ctrip 2019 shows that the net revenue in the second quarter of 2019 is 8.7 billion yuan ( about $1.3 billion ), an increase of 19% compared with the same period of last year and 6% compared with the previous quarter. And the operating profit is 1.3 billion yuan, an increase of 84% compared with the same period of last year. Among them, Ctrip's international business performance is very outstanding, and its international business income accounts for more than 35% of the group's total income.
Ctrip is not an Internet giant, but in the process of globalization, it is obviously the leader of most Chinese giants.
The sea gene
Ctrip was born with the ambition of globalization. In 1999, "four gentlemen" gathered together to aim at Internet + tourism, and they founded Ctrip. Taking advantage of the upsurge of Internet and the good situation, Ctrip has become a pioneer in the field of Internet tourism.
Four years later, in December 2003, Ctrip successfully landed on NASDAQ in America, and an oriental face appeared in the field of online tourism.
Also listed on NASDAQ is Booking Holdings Inc. (hereinafter referred to as "Booking"). But at that time, Booking didn't notice the oriental rookie.
Shen Nanpeng, one of the founders of "four gentlemen", recalled that Ctrip had started to make profits before listing, but it was still difficult to carry out the C-round financing in September 2003. At that time, few venture capital firms were willing to increase Internet companies under the Internet bubble. In addition, at that time, it coincided with "SARS", and the overall flight package business was depressed. In this case, Ctrip insists on the road of globalization.
In the three years since its listing, Ctrip has been firmly on the top of the Chinese online tourism market, with its performance climbing. At this time, "four gentlemen" don't seem to worry about Ctrip at all. They began to start a business, venture capital and read blog one after another. Only Fan Min, the vice president of Ctrip stayed to continue this business.
But the luck did not last long. In 2007, Qunar.com and Elong began to emerge in the market and gradually surrounded Ctrip. In the five years until 2012, Ctrip has been fighting in the Chinese market.
In 2013, Liang Jianzhang returned from the United States after finishing his doctoral degree. He successfully pulled Ctrip out of the dilemma, which boosted his powers.
The first step is to invest $500 million to get back the market share taken by Qunar.com and Elong at a low price. The second step is to accelerate the transformation of Ctrip from PC end to mobile app end. The third step is to "save the nation by indirect way", Ctrip and Baidu, the shareholder of Qunar.com, talk about a merger, and break up Elong's cooperation Tongcheng, and finally realize the dual acquisition.
Ctrip goes out, leading the air ticket business
The growth of the Chinese market gradually was in a dilemma, Liang Jianzhang began to focus on the overseas market, leading the air ticket business.
In the UK market, Ctrip acquired Travel fusion, a British low-cost airline information integration and reservation platform, for $100 million in early 2015. In December of the next year, Ctrip acquired Skyscanner, the largest tourism search engine in the UK, for £ 1.4 billion, and assisted Skyscanner to complete the mobile upgrading.
In the North American market, Ctrip acquired the small US social tourism website trip.com in 2017. In the last year, Ctrip also made strategic investment in the three land contact agencies in North America, including the Seagull Holiday, the largest western contact agency in the United States, and Tours For Fun, the largest vertical and horizontal group in the East.
The combination of Skyscanner and Ctrip has the effect of 1 + 1 > 2. Skyscanner is responsible for obtaining customers, Ctrip is responsible for the flight package services. And the two work together to drive the rapid growth of Ctrip's overseas air ticket business. In the overseas market, some ticketing businesses of Ctrip choose to bypass the supplier's direct link airlines, so that the company can make quick response in ticket order and inventory, and also get the best price.
According to the financial data, as of the third quarter of 2019, Trip.com's overseas air ticket sales have maintained 3-digit growth for 12 consecutive quarters. Xiong Xing, CEO of the airline business, is a veteran of the industry that Liang Jianzhang poached from Expedia, a competitor of Booking, in 2013.
For the recognition of trip.com, on the 20th anniversary, Ctrip announced to change its English name from transliteration Ctrip to trip.com. He wants to rely on the reputation of its overseas business brand, trip.com to gain the international image of Ctrip's next journey. And its NASDAQ stock code also changed from CTRP to TCOM.
Air ticket business belongs to the big traffic in Ctrip's traffic ticket business, while urban travel is the main venue of small traffic.
In the small traffic, Ctrip will do both. On the one hand, it makes its own efforts to create overseas travel services; on the other hand, it invests in the acquisition of overseas vehicle platforms.
In 2015, Ctrip launched more than 100 overseas Chinese private car rental products for the European market, and later reached strategic cooperation with China Auto Renting Inc. and UCAR Inc..
At the beginning of 2017, Ctrip acquired the overseas Airport Transfer& Limousine Booking service of Chinese. The systems of both parties were all connected. Ctrip's order can be connected to Chinese pick-up system, and the whole vehicle specification can be monitored in the back system, so as to facilitate vehicle scheduling and service.
In February 2018, Ctrip's overseas train ticket app TrainPal went online in the UK, and successively launched services in European markets such as Germany, France and Spain. TrainPal's positioning is "12306 European version". Its main function is to help users calculate the optimal combination by splitting ticket segments to save ticket purchase expenses, sometimes up to 40%.
At present, TrainPal has been connected with all train ticket booking entrances such as Skyscanner and Ctrip app, as well as payment, customer service and language services.
In 2019, the pace of Ctrip is faster and faster. In July, Ctrip app launched overseas taxi service, aggregating international travel service providers such as Grab to solve overseas travel problems such as one-click taxi, Chinese translation and RMB payment. In September, Ctrip also teamed up with Baidu to optimize maps and travel services.
As a tourist, no matter what kind of traffic it is, Ctrip will give you a spur-of-the-moment trip.
Hotel business trot to catch up
If Ctrip's ticket business goes out by overseas investment and merger, the globalization of its hotel business is to learn from Booking.
In 2012, Ctrip and Booking started to reach a consensus, and both sides decided to share global hotel inventory and services. In the next five years, Ctrip has successively accepted the strategic investment of Booking totaling $1.25 billion. In 2018, Ctrip also accessed the North American catering reservation service of OpenTable, which is owned by Booking.
After the joint development of the two, Ctrip has access to Booking's property management system (PMS) and channel manager system (CM).
Chen Ruiliang, CEO of Ctrip's accommodation business group, told the media that he had learned a lot of new ideas and technical systems from Booking. Ctrip's system and operation had been significantly improved.
For example, when the hotel uses e-booking system, it usually needs to input room price, location, inventory and other information. Ctrip's system needs the hotel to fill in all the information at one time. However, Booking allows the system to be used only by filling in the required information, and other information can be improved in subsequent use.
Ctrip relies on Booking to enter its North America and Europe market. Booking takes this opportunity to enter the Chinese market and gain an observer seat on Ctrip's board of directors.
However, due to the market and cultural differences between countries and regions, Booking experience can not be used throughout the venue. Ctrip started to make internal efforts. It sent internal staff to overseas market research and investigation, and set up localization team and offline operation.
In the Korean market, Ctrip chooses to hire Korean employees who are familiar with China to set up a hotel self-procurement team. Japan, South Korea and Thailand are the best head markets for Ctrip hotels.
In the third quarter of 2019, Ctrip international hotel business (except for destinations in China) achieved a year-on-year growth of 50%. The total hotel business booking revenue was 4.1 billion yuan ( about $576 million ), up 14% year on year.
In other areas of tourism and holiday business, Ctrip began to invest in Make My trip, an online travel platform in India in 2016, and became a major shareholder in 2019, striving to build it into an Indian version of Ctrip. Inside Ctrip, they called this move "the second-time undertaking". Ctrip has also invested a lot of energy in the European markets such as Germany, Italy and the main markets in Southeast Asia.
In November this year, Ctrip announced the establishment of a new joint venture with Trip Advisor as TripAdvisor China's global operation. The two sides will share the inventory of tourism categories, with Ctrip holding 60%. Like Meituan, Trip Advisor has a lot of comments on eating, drinking and playing, which will have a synergistic effect on Ctrip's tourism products.
Ctrip develops steadily with the experience of Booking
In 1996, Booking (formerly Priceline) started from the United States. At first, it only relied on Priceline as a tourism platform to fight alone. Since 2004, it has invested and acquired in a large scale around the world and gradually occupied the leading position in the online tourism market. Its subsidiaries have successively owned online tourism platforms Booking, Priceline, rentalcars, tourism search engine Kayak, accommodation booking platform Agoda and catering service platform Open Table.
The six brands mentioned above are all local strong players before Booking's investment and merger. If Booking fights with it head-on, it is not only easy to be acclimatized, but also likely to backfire on itself.
Through continuous acquisition, Booking's profit and market value exceeded the original industry No.1 Expedia for the first time in 2009 and widened the gap.
In the Chinese market, Booking not only realizes its own business, but also strategic investment such as Ctrip, Meituan Dianping and Didi Chuxing. It worked with Ctrip for product sharing and user mutual guidance, connected with Meituan for Agoda overseas hotel inventory, and provided Didi with a call interface in the Booking application.
Booking's growth experience has great reference significance for Ctrip. To some extent, it is also a teacher and a friend, competing and cooperating with each other. We often say that we touch the stone to cross the river, and Ctrip can also be said to "touch" Booking to cross the river.
At the 2019 Internet Conference, Sun Jie, CEO of Ctrip, once expressed the goal of internationalization. He hoped that within four to five years, Ctrip's international business revenue accounted for 40% - 50%. This is also the task Liang Jianzhang left for Sun Jie after leaving office. At present, the figure remains at 35%.
According to Liang Jianzhang, the growth of China's inbound tourism is "very poor". In the past decade, there has been little growth. On the contrary, the growth of outbound tourism is "very fast". If the contribution of inbound tourism to GDP is taken as a ratio, China will be at the bottom of 0.3%. This is also the reason why Ctrip's next journey is positioned as globalization.
This is an article from The Passage, Translated by Chris Yuan.