Online travel Ctrip A single big 15 million dollars with the passers-by "to be friends"

Absrtact: Yesterday, the US Securities and Exchange Commission (SEC) submitted a prospectus supplement to the IPO. Documents show that Ctrip will be on the way cattle IPO completed at the price of cattle to buy a 15 million-dollar stake. The previous day, Ctrip has just announced 200 million beautiful

Yesterday, the Bulls submitted to the Securities and Exchange Commission (SEC) the IPO (initial public offering) prospectus supplement document. Documents show that Ctrip will be on the way cattle IPO completed at the price of cattle to buy a 15 million-dollar stake. The previous day, Ctrip has just announced 200 million U.S. dollars to invest in the same process, become its second largest shareholder. Ctrip continues to invest in competitors, bringing online travel (OTA) pattern mutations.

15 million dollars and "friends" with the Bulls

Yesterday, the alternative to the IPO prospectus, which was submitted by passers-bull, showed that the top dollar for its IPO deal was reduced from $120 million trillion to $101.2 million. The IPO pricing interval is set at $9 to $11 per share of US depository stocks, representing 3 shares of Class A common stock per share.

At the same time, the document also shows that Ctrip has reached an agreement with the passers-by on April 27, will be in-transit cattle IPO to purchase the value of 15 million U.S. dollars (RMB 90.8 million yuan) stake. After the transaction is completed, Ctrip can assign a director to the board of the passers-cow.

According to industry estimates, after the listing of cattle, the overall market value of more than 1 billion U.S. dollars, Ctrip investment of 15 million U.S. dollars, a small proportion. Analysts believe that the strategic significance of a competitor becoming a "friend" is more important than financial gain.

Good team Consulting general manager Wei Changren to Beijing News reporter said, two cooperation is in the business, the competition is inferior to cooperation. For passers-by, the prospectus is not the first in the industry, Ctrip is not open to the enemy. With Ctrip to the enemy for friends, the way cattle investors are good, two of cooperation together to enlarge the market cake.

Yesterday, Udunder CEO and COO Hai Feng in the internal Mail said, online leisure tourism market space is huge, ctrip this financial investment is optimistic about the development of the cattle. Last year, the entire leisure tourism market scale of nearly 400 billion, of which the online leisure tourism market scale of only 30 billion, the industry penetration rate is only 7.7%, and the way cattle and Ctrip add up also accounted for a very small part. At the same time, Ctrip and the pedestrian business there are significant differences, the main road is outbound cattle, with group tour, Ctrip in the field of self-help tour scale larger.

Online travel Ctrip or a single big

On the way cattle and Ctrip announced "to be Friends" the night before, Ctrip has just announced a 200 million dollar investment has been the main competitor to the same process, after the same management team's second largest shareholder.

Wu Zhixiang, founder of the same process in an internal mail released on 28th, said Ctrip will be the attraction tickets to pay the current business access to the same process, the same process will restart the IPO in two years, Ctrip will support the same process independent IPO. Wu Zhixiang called the investment "a strategic step in the company's ten-year entrepreneurial journey".

For Ctrip continuous investment action, Iris analyst Wang Kingston believes that Ctrip can invest to expand the territory, to ensure their own business in the absolute leading edge. The same way in the leisure tour, tickets on the leading, passers-by in the group tour with the leading, are the driving force of Ctrip investment. If Ctrip's own redevelopment, it will cost a great deal of money, including a lot of human and material inputs, as well as direct investment.

Wei Changren also said that Ctrip through investment, rivals to become friends, there is no need to continue the price war to play badly beaten. Reduce the loss of vicious competition at the same time, can also be through the cattle and the same process of listing to gain.

Prior to this, the domestic OTA pattern for Ctrip, the same process, Art Dragon, three agents and where to go to the network platform between the competition. Analysis that, in the continuous investment of Ctrip, the market concentration more rely on Ctrip, the same process, Art Dragon appears to be isolated.

Influence

"Super low price" tourism products are difficult to reproduce

Ctrip continued to invest in competitors, in addition to some unified the meaning of the river, bringing another result, that is, the strength of the price war weakened. This means that consumers may rarely see the "blood spell in the end" of tourism ultra-low-priced products.

This year Qingming Festival, 51 holiday period, ticket market price war played very to force. Ctrip's slogan is "Do ticket business do not seek to make money, but will be the price of tickets to the end." Donkey mother threatened to hundreds of millions of yuan "die Knock" Ctrip, which directly dumped a number of scenic spots 10 percent, vacation 20 percent of the slogan.

Together with many scenic spots for "1 yuan tickets" activities, the original price of 50 yuan to more than 100 yuan in various major scenic spots during the activities through the same travel booking are only 1 yuan, including Henan Luanchuan Laojunshan, heavy crossing ditch scenic spots and many other scenic areas, and even the original price of more than 100 yuan in Shaoguan Danxia Mountain in Guangdong.

In the group, outbound travel, Ctrip and passers-by are also in the special line, free WiFi.

After the enemy is a friend, the price war may no longer be overweight. The industry believes that while the number of ultra-low priced products available to consumers is reduced, the service and experience will improve as companies invest more resources.

Team Consulting general manager Wei Changren said, the price war weakened, the industry to reduce internal friction, is good for the enterprise. Eric Kingston, the analyst, also said that ultra-low prices are short-lived, and no business will play a 10-year price war. When enterprises put more resources into the optimization of service experience, rather than the price of vicious competition, for consumers, the market is more beneficial.

Background

On the competition and combination of the online traveling rivers and lakes

Since April this year, the various "gossip" of online travel has been followed by waves.

At the beginning of April, the industry rumors, Baidu Matchmaking to where and Ctrip merger, will strategic investment Ctrip, in exchange for online tourism dominant position. Then, Ctrip, where to go the CEO responded by saying that they would take the lead, but did not directly admit or deny the merger rumors.

Since then, Ctrip in the hotel business and leisure travel business of the Enemy, Art Dragon and the same process, soon announced April 10 strategic cooperation. Two on 16th in Beijing held a conference, the title of "Art from peer" to each other to provide exclusive advantage of resources, is seen as holding a regiment against Ctrip. Then, Ctrip and the same process announced investment cooperation.

Time goes back to last April. Where to go? The network in the hotel area to promote its own online trading system (TTS system) to large OTA, in order to move all the trading links to its platform, and the Pay-per-click advertising price increases, the OTA are fiercely opposed. Last April 1, the Art dragon, the same way, Mango, teng Bang international, such as large OTA group under its go online hotel products. Subsequently, the same process to take the lead to recover where the product, art dragon, etc. also gradually resumed cooperation.

Last October, where to go net and art Dragon due to the hotel inventory distribution agreement, and eventually sued the court, the relationship was deadlocked.