The online battleground for the bulging wallets of Chinese tourists is heating up. Friday, online direct sales company JD.com said it would invest $350 million in online travel agency Tuniu Corp. as part of a $500 million total pledge by a group of investors that also includes affiliates of Hony Capital and DCM.
JD.com will become Tuniu’s largest shareholder, while Tuniu will be the exclusive leisure travel provider for JD.com’s website and mobile applications.
China’s Internet giants have moved to expand their services and offerings in an intensifying competition to capture larger shares of the hundreds of millions of Chinese people who regularly use the Internet. Services include buying movie tickets, ordering food and hailing taxis, and they often fall outside the companies’ core businesses.
Travel is enjoying a boom among Chinese. Brokerage CLSA said it expects the total number of Chinese outbound travelers to hit 200 million in 2020, almost double last year’s levels.
Tuniu Chief Financial Officer Conor Yang said China’s online market for travel is experiencing very robust growth. He said the additional funds would help strengthen Tuniu’s position through investment in brick-and-mortar marketing outlets nationwide, brand building and technology, including mobile.
JD.com said the partnership with Tuniu is like its recent agreement with Bitauto on automotive-related content and services. Such agreements help further JD.com’s goals of creating a one-stop shopping platform for Chinese consumers, it said.
The addition of travel-booking services on JD.com’s e-commerce site could help it compete against China’s biggest player Alibaba Group Holding Ltd., which has built up an expansive network of online offerings, including flight and hotel booking services, many of which are supported by Alibaba’s affiliated online payments business Alipay.
In December, Tuniu raised $148 million from a group of investors that also included JD.com, which at that time put in $50 million.
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Article: Wall Street Journal