Ctrip faces internal

has occupied the domestic online tourism market Tau Ctrip, in the airline ticket direct and to where, Taobao and other air tickets and hotel booking business squeeze, the share price plunged, the market value shrank by more than 70%, and was excluded from the Nasdaq-100 Index range. In the situation of the leading position at stake, Ctrip had to bear the pain of transformation and price war, the success of the transformation will determine its survival.

Ctrip faces internal

Ctrip Travel Network from the establishment to the peak, ten years to create a number of industry first, and sit on the online tourism market leading position. However, in recent years, with the rapid rise of emerging forces, from market capitalisation to marketing share Ctrip senility.

October 1999, Ctrip launched the travel network, quickly seize the China online tourism market, successively in 2000 and 2002 Beijing Hyundai Express Booking Center and Beijing Coast Air Service Co., Ltd., and in May 2002 to start the National central air ticket booking system. Hotel reservation volume in the year the domestic hotel distribution industry top. December 2003, Ctrip listed in the United States Nasdaq, Chuang na City in three years to the highest record of the opening day, November 2004 Ctrip built the first international air ticket online booking platform.

While expanding the business, Ctrip managers pay attention to management and facilities construction, March 2010 Ctrip started the hotel the lowest price commitment; May 2010, With more than 12,000 call seats, the Ctrip information Technology Building is officially completed in Nantong, Jiangsu Province, which has become the largest tourism call center in the world. July 2010, Ctrip was selected "Forbes" "2010 Chinese brand Value List", January 2011 was selected the Ministry of Commerce "China's ten Modern services innovation enterprise."

However, in the past two years, by the same industry to where, Taobao and other platforms on the air tickets and hotel reservations market squeeze, as well as the impact of airline ticket direct, Ctrip market share reduced, profit margins reduced. From the revenue point of view, the second quarter of 2012, Ctrip's total operating income of 162, 2.8 billion U.S. dollars, an increase of 18.33% year-on-year, net profit fell 53.83%, the chain down 29.83%.

Ctrip faced internal at the same time encounter aggression, July 23, Ctrip was officially excluded from the Nasdaq-100 Index range, by the world's second largest food and beverage company Kraft Food Company replaced.

As of July 31 the stock market closed, Ctrip's share price has fallen from the 2010 peak of 52.15 U.S. dollars to 12, 48 U.S. dollars, shrinking more than 70% (76%), the decline is also greater than the overall trend of China's concept stocks. The corresponding market value was reduced from about 8 billion dollars to $1.79 billion.

The dilemma stems from fierce competition

Ctrip's dilemma is mainly due to the fierce competition in the airline ticket and hotel reservation business throughout the online tourism market. Airline ticket direct, where to go vertical tourism search, the traditional electric business Taobao, Jingdong Mall, Suning and easy to buy also a large set foot in the online tourism industry, tonight special hotels and other mobile a PP application "emerging" ... More and more competitors to join, further divided the Ctrip online booking market share. In the face of competition, Ctrip's internal distribution model lacks innovation and reactive response, which exacerbates the dilemma.

Analysts pointed out that the airline ticket direct, lower air fares agent commission rates, to depress the profit margins of online agents, to Ctrip air tickets online booking business caused a direct impact. The art of the second table in the implementation of the other O T a manufacturers to open inventory strategy and hotel Group purchase, rebate and other means of profit, with small profits and quick turnover to accelerate the pace of the pursuit of Ctrip. and Taobao, where and other new types of websites to enter the airline ticket booking business, to seize market share, greatly compressed Ctrip's market share.

Convenient, fast, cheap is the direct reason for people to book tickets online, different distributors of the maximum price difference in 10% or even more than 20%, the way mainly includes distributors, such as the return of the price war, the competition behavior, once again reduced Ctrip online ticket booking profit space. In the context of the tight ticket booking business, Ctrip's hotel business also faces severe challenges.

To launch a price war with huge sums of money

Faced with the decline of the situation, Ctrip tried to transform, and with huge sums of money to start a price war, but it is.

Ctrip nearly two years of positive transformation, all-round expansion of business, including hotels, air tickets, vacations, food, travel and so on, and the construction of large call centers, investment line hotels and travel agencies, to create a one-stop tourism service provider. Ctrip insiders to the economic reference newspaper reporter frankly: already have business force too big, ctrip transformation face difficulties.

Some analysts believe that the company's core soul characters out of the development of Ctrip is one of the root causes. Ctrip's Travel Network was originally created by Liang Jianzhang, Hanting, Shen and fan, who said "Ctrip Four Gentlemen". After Hanting and Liang Jianzhang both withdrew Ctrip, and Shen Main energy into the investment field.

Ctrip Head fan very focus on the business to the line to expand, but its sensitivity to the internet seems to be weaker, this virtually affect the pace of Ctrip into the mobile internet and style, in technology and distribution mode innovation, Ctrip appears more passive, and in the competition to lose its advantages.

The return of Liang Jianzhang now makes it seem reasonable to rekindle hope. Ctrip in the consolidation of their status, into the history of the largest marketing funds to carry out the price war. Ctrip founder Liang Jianzhang on July 5 announced the investment of 500 million U.S. dollars (about 3.2 billion yuan), for a one-year low price promotion, compared to the previous years marketing costs have been raised nearly 10 times times.

In the development of new market segments, according to Liang Jianzhang Introduction, at present, Ctrip investment involves high-end tourism market "Honghu Yi Tour", the rental of vacation rentals operating "passers-by network" and the operation of the Inn investment "pine cone nets."

Wu Sanmao, an analyst with Snowball finance I, points out that Ctrip's holiday travel business grew 24% per cent in the two quarter, at a slower pace than the 33% in the previous quarter. Ctrip continued in product development, in particular, leisure travel related products and services have made a lot of investment in order to enhance Ctrip to provide a one-stop tourism products and services, "it is in the hotel reservation field helplessly playing price war, but also hope that in the leisure tourism market to gain new growth."

Analysts pointed out that Ctrip should not be eliminated in the product weight, in addition to expanding new business, it is necessary to maintain their brand reputation, improve customer stickiness, line goes hand in hand.