Ctrip.com, China’s biggest travel website, said it would accelerate expansion overseas amid “blowout” growth of the country’s tourism industry, founder and chief executive James Liang Jianzhang told the South China Morning Post.
In January, Nasdaq-traded Ctrip acquired a majority stake in TravelFusion, a London-based air tickets and hotel booking website for an undisclosed sum. “Starting with TravelFusion, Ctrip will invest in totally foreign companies,” Liang said in an email interview with the Post.
In the past, Ctrip’s overseas investment is either in Hong Kong and Taiwan, or in foreign firms focusing only on Chinese tourists. “We will quicken our internationalization,” Liang said. “Our investment priorities are companies complementing our business.”
His recent remarks that the market valuation of Ctrip will exceed that of e-commerce company JD.com in three years made many raise their eyebrows. The valuation of Ctrip is currently only one fifth of JD.com, the mainland’s largest online direct sales company.
Liang said his confidence is built on the potential of online tourism in the country, whose growth rate will far exceed other e-commerce categories. “Average tourism spending of Chinese people is only one tenth of that in the US,” he said, “Compared with other types of e-commerce firms, our momentum is stronger.”
Liang said the online tourism market size in 2013 was 180 billion yuan (HK$228.6 billion), accounting for 10 per cent of the country’s overall tourism market. He expects the proportion to rise to half by 2020. “There will be a blowout style growth,” he said.
The market size of online tourism will reach 352 billion yuan in China this year, and is expected to reach nearly 500 billion yuan in 2017, according to market research company Enfodesk.
Liang said Ctrip will also put emphasis on developing mobile apps to cater to the increasing number of Chinese tourists who are shifting from PC to mobile devices to book their hotels and air tickets. “To do so requires a lot of investment,” he said. “The competition, no matter with domestic or foreign rivals, is about products and services.”
Liang, 45, got his Masters degree from the Georgia Institute of Technology when he was 20. He co-founded Ctrip in 1999 and served as chief executive between 2000 and 2006. Then he left the company to study economics and received a Ph.D. degree from Stanford University. In 2013 he resumed the role of chief executive when the company was losing market share to rivals including elong, which is backed by technology giant Tencent.
Last year, the country’s largest e-commerce company Alibaba rebranded its travel business as Alitrip to strengthen its tourism business.