Alibaba Group Holding Limited
) spun off its travel sites into a separate business called Alitrip
in October, the growing importance of China's online travel booking
market was highlighted. Alitrip combined national and international
bookings for airplanes, hotels, cruises, package tours, and more
from across Alibaba's key Chinese e-commerce marketplaces -Taobao,
Tmall, and the Juhuasuan daily deals site.
It's not very difficult to see why the Chinese e-commerce giant,
Alibaba, wanted to rebrand and refocus on its travel business.
According to online travel tracker PhoCusWright, gross bookings
in China's online travel market reached $18.2 billion in 2013,
making China second in the Asia-Pacific region only to Japan. He
expects China to beat Japan by 2016.
Competitors take the Challenge
PhoCusWright is of the opinion that Alitrip's entry increases
competition in the Chinese online travel market, given the fact
that it is backed by Alibaba, which has a huge reach in the online
U.S.-based Expedia (
) is one of the world's top travel service companies. It has
industry leading online brands like Expedia.com, Hotels.com,
Hotwire.com and TripAdvisor under its belt. The company is
increasing its investment in eLong (
), a Chinese online travel agency, to meet the new threat.
Priceline, which has been in collaboration with Ctrip since
2012, is also interested in its share of the pie. Earlier this
year, Priceline reinforced its commercial partnership with Ctrip by
investing $500 million in the company. Priceline expects the
acquisition to broaden its presence in China, where it is currently
under-represented in the accommodations space.
Qunar Cayman Islands, a metasearch travel website owned by
China's search giant Baidu (
) and Tencent saw its total revenue jump 107.8% year over year to
$81.6 million in the third quarter.
Qunar's co-founder and CEO Chenchao "CC" Zhuang stated that he
is not losing sleep over Alitrip, Ctrip's enhanced partnership with
the Priceline Group and Expedia's aggressive investing in China's
According to the China National Tourism Administration, China
tourism revenues increased 14% to $480.88 billion in 2013 from the
prior year. International travel from China jumped 18% to 98.2
Boston Consulting Group predicts that by 2030, tourists from
China will account for around 40% of outbound Asian travelers;
taking 1.7 billion trips annually, up from 500 million trips taken
in 2012, the latest year for which data was available. It predicts
Chinese tourists will spend about $1.8 trillion on travel and
tourism by 2030, nearly seven times what they spent two years
So opportunities abound in the Chinese travel market and all the
players will likely benefit.
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