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Ctrip.com's International Expansion Strategies

Ctrip.com's International Expansion Strategies
Case Code: BSTR542
Case Length: 11 Pages
Period: 1999-2017
Pub Date: 2018
Teaching Note: Available
Price: Rs.300
Organization: Ctrip.com International Limited (Ctrip)
Industry: Online Travel Agency (OTA)
Countries: China
Themes: Corporate Strategy, Growth Strategy, M&A, E-Business Strategy
Ctrip.com's International Expansion Strategies
Abstract Case Intro 1 Case Intro 2 Excerpts


Competing with Technology

Ctrip had constantly been acquiring new technologies to serve its customers. Artificial Intelligence, big data, and intelligent hardware employed by Ctrip were crucial in providing a superior travel experience. Jane Sun (Jane), Ctrip’s Chief Executive Officer, said, “For the user interface, we want to make sure that we know every customer who has purchased or searched on the Ctrip website. So when we list our products for them, it’s not millions of items that they have to search through -- the user experience wouldn’t be maximized. Hopefully we can personalize the display. All of that is in our design. When the customer purchases with us, they (may not) know what they want, but we know what would fit them. That’s a way technology will help us” ...

Ctrip's Strategic Investments and Acquisitions

Ctrip maintained its leading position through a series of strategic investments and acquisitions. From 2013, the company began expanding aggressively expanding internationally. Feifei Xu, Director of Brand Strategy, Labbrand, said, “Their international expansion aims to offer Chinese out-bound travelers or foreign companies in China an extension of their value-chain platform of tourism. By international expansion, they are mostly targeting outbound Chinese travelers.” In 2013, Ctrip invested in travel search engine Kuxun, hotel app Economy Hotel Manager, social trip sharing platform Chanyouji, and car rental services Yongche and eHi Car Services. (See Exhibit III: CTRIP’s Major Investments 2015-2016)...

Challenges and Opportunities

The acquisition of Skyscanner, while contributing substantially to Ctrip’s growth, intensified both domestic and international competition. To compete effectively with Ctrip, other OTAs in China made attempts to attract large investments. Meituan Dianping raised US$4 billion in a funding round led by Tencent Holdings . Interestingly, Priceline, which was Ctrip’s largest shareholder, also participated in the funding round. (Refer to Table 1 for more on Priceline & Ctrip Partnership). Agoda.com, owned by the Priceline Group, established a strategic partnership with Meituan Dianping. This strategy of Priceline investing in Ctrip’s domestic competition indicated that it perhaps saw Ctrip as a potential threat and thus made an investment in Meituan Dianping that could lead to hedging its bets against Ctrip. However, analysts felt that Ctrip was strong enough to take a further share of the Chinese OTA market and its long-term growth prospects in China remained strong....

Road Ahead

Adding Skyscanner’s revenue to Ctrip’s total boosted Ctrip’s Q3 2017 transportation-ticketing revenue by 41 percent to US$515 million. Cindy Wang, Chief Financial Officer, Ctrip, said, “The total number of transactions made by direct booking increased almost three-fold since May (2017), the month we launched the engine on Skyscanner, through September.”...


Exhibit I:Market Capitalization of Ctrip
Exhibit II: Net Revenue of Ctrip (2003-2016)
Exhibit III: Ctrip’s Major Investments 2015-2016
Exhibit IV: China’s Inbound & Outbound Tourism
Exhibit V:Acquisitions and Investments by Leading OTA

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