Ctrip hurt by "electric Dealer price war": last quarter marketing fee increased by 54%

In the first quarter of this year, http://www.aliyun.com/zixun/aggregation/5414.html "> Ctrip Travel Network (NASDAQ:CTRP) of marketing costs surged 47%. That's not the end of it. In the second quarter, the company's marketing costs rose 18% from the previous quarter, to 217 million yuan (the same as the renminbi), up 54% from a year earlier (Year-on-year).

United States time July 24, Ctrip released the second quarterly bulletin as at June 30. Earnings showed that the company's quarterly net profit was only 120 million yuan, a sharp decline of 55%.

This means that, at the end of 2011, a clear promotion of ctrip, in order to ensure market share and hurt themselves. But Ctrip did not slow down the promotion, and in early July it announced a "500 million-dollar mandate, a first-year" large-scale promotional program.

According to earnings, two quarter, Ctrip total revenue 1 billion yuan, an increase of 17%. Hotel and air ticket booking business is still the largest source of income, in the quarter of the two business brings 400 million yuan revenue, tourism business and business travel management income of 130 million yuan and 49 million yuan respectively. The above four businesses grew by 12%, 16%, 24% and 25% respectively year-on-year.

These seemingly "everything is growing" income, does not produce good-looking net profit, the problem is that marketing costs are higher. Ctrip official explanation, the main reason for the growth of marketing costs, and "the recent large-scale marketing activities and to the leisure tourism market expansion related to the increase in marketing activities and personnel increase".

Earnings showed that in the two quarter of 2011 to date, marketing costs of the quarterly growth rate of 33%, 39%, 45%, 47%, 54%, rose from 141 million to the current 217 million yuan.

"We believe that our investment today will consolidate and enhance Ctrip's long-term market leadership," said Fan, chairman and chief executive of Ctrip, after the 24th earnings release. ”

20 days ago July 5, fan flap, issued a "Chan" battle order. The company announced on the day that it had obtained a 500 million-dollar mandate from the board and would start a one-year low price promotion since July 2012. 500 million dollars in the budget than Ctrip in previous years, the annual marketing funds jumped nearly 10 times times, which is also known as Ctrip since 12, the first large-scale promotional. After the message, fan on the micro-blog immediately announced the campaign started, "travel power business if it is not a Chan field, then let the storm!"

In fact, the fan area of tourism electricity is practically the Red Sea. In the standardization of higher air tickets, airlines direct sales and some low-cost platform for Ctrip significantly. The market pattern has changed, before there are art long nets, where to go, mango nets, with the network, such as "Old Friends" competition, after the Jingdong Mall, Taobao and other internet and tonight special hotel, such as later rookie Zobon right.

Ctrip can no longer calm, the online tourism field of "Big Brother" finally endure the industry's competitors "provocation." Ctrip predicted that this round of price war will be "6 months later, not more than a year to be seen, after the chaos must have Zhi, will find the entry threshold for online tourism higher."

25th, the stock market after the opening, Ctrip shares plunged more than 8%. Ctrip's shares have fallen more than 70% per cent in the past year. Ctrip was excluded from the change in the Nasdaq 100 Index, released last week.