Chinese travel giant Ctrip looks to go global
While the company is No. 1 at home, Ctrip is an ‘infant’ around the world, says CEO Jane Jie Sun.
China’s outbound tourism industry is growing rapidly. Ctrip, China’s biggest online travel site, is challenging Priceline to become the world’s biggest online travel platform.
Wall Street Journal senior editor Yun-Hee Kim spoke with the company’s chief executive, Jane Jie Sun:
MS. KIM: You did a major acquisition last year, the USD 1.7 billion deal to buy travel search site Skyscanner. When you look at acquisitions, what do you look for?
MS. SUN: First, it needs to be closely related to our core business, which is travel. The second thing is, normally when we look at the target, it needs to be the No. 1 or No. 2 industry leader in that vertical. The third criteria is the valuation needs to be reasonable.
MS. KIM: You have also been acquisitive in the U.S. How is your strategy in the U.S. different from Europe?
MS. SUN: In the United States, we saw a very strong trend for customers to move from the rest of the world to the United States. The visa restrictions in the United States were finally lifted up. Chinese citizens were able to get 10-year visas. Second, lots of young kids are very curious and want to study in the United States. And third, the U.S. has lots of travel resources, and it’s relatively very safe.
So when we saw the trend to move customers from the rest of the world to the United States, then we needed to make sure our customers were provided the best service, best products.
So our three investments in the United States will be able to block the best hotels, the best transportation for our customers.
MS. KIM: Ctrip.com has pretty much consolidated China’s online travel market. Do you see further room for consolidation in the global market?
MS. SUN: We are the No. 1 player in the China market. There is lots of room for us to further penetrate into the second-tier and third-tier cities. In the global space, though, Ctrip is an infant. I think the golden years are yet to come. So we are very excited about the future opportunities.
MS. KIM: You have a 10% stake in MakeMyTrip in India. India’s a very competitive market, but also very different from China. What are the biggest challenges there and why did you decide to invest?
MS. SUN: India will overtake China as the most populous country in the world. Although the GDP per capita is quite low, it has potential to grow the affluent portion of its people. And these people will be able to travel.
The India market is very similar to China in the sense that it’s very localized. Only local people know how to deal with the government, how to develop that market. We believe MakeMyTrip is a very good player in that market.
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