Ctrip Sets Its Sights Globally -- WSJ
CEO Jane Jie Sun says that while her company is No. 1 in China, it is an 'infant' around the world
China's outbound tourism industry is growing rapidly. Ctrip.com, China's biggest online travel site, is challenging Priceline to become the world's biggest online travel platform.
To discuss Ctrip.com's growing ambitions, Wall Street Journal senior editor Yun-Hee Kim spoke with the company's chief executive, Jane Jie Sun. Here are edited excerpts of the discussion.
MS. KIM: You did a major acquisition last year, the $1.7 billion deal to buy travel search site Skyscanner. When you look at acquisitions, what do you look for?
MS. SUN: First, it needs to be closely related to our core business, which is travel. The second thing is, normally when we look at the target, it needs to be the No. 1 or No. 2 industry leader in that vertical. The third criteria is the valuation needs to be reasonable.
MS. KIM: You have also been acquisitive in the U.S. How is your strategy in the U.S. different from Europe?
MS. SUN: In the United States, we saw a very strong trend for customers to move from the rest of the world to the United States. The visa restrictions in the United States were finally lifted up. Chinese citizens were able to get 10-year visas. Second, lots of young kids are very curious and want to study in the United States. And third, the U.S. has lots of travel resources, and it's relatively very safe.
So when we saw the trend to move customers from the rest of the world to the United States, then we needed to make sure our customers were provided the best service, best products.
So our three investments in the United States will be able to block the best hotels, the best transportation for our customers.
MS. KIM: Has your business been impacted at all by the political climate in the U.S.?
MS. SUN: So far, not significantly, because travel is not political. When we send a customer to the rest of the world, I always encourage our team to tell our customer, "You represent China. You are the best diplomats of China. Please bring the best of the culture of China to the rest of the world. And when you come back, bring the best of the world back to China." Travel encourages international cultural exchange and therefore promotes peace. So far, so good.
MS. KIM: Ctrip.com has pretty much consolidated China's online travel market. Do you see further room for consolidation in the global market?
MS. SUN: We are the No. 1 player in the China market. There is lots of room for us to further penetrate into the second-tier and third-tier cities. In the global space, though, Ctrip is an infant. I think the golden years are yet to come. So we are very excited about the future opportunities.
MS. KIM: You have a 10% stake in MakeMyTrip in India. India's a very competitive market, but also very different from China. What are the biggest challenges there and why did you decide to invest?
MS. SUN: India will overtake China as the most populous country in the world. Although the GDP per capita is quite low, it has potential to grow the affluent portion of its people. And these people will be able to travel.
The India market is very similar to China in the sense that it's very localized. Only local people know how to deal with the government, how to develop that market. We believe MakeMyTrip is a very good player in that market.
MS. KIM: Let's talk about regulatory challenges. What are the headwinds that you see coming from the government?
MS. SUN: The government is very supportive of travel, because we are nonpolitical. We bring people together. So our government supports us. And enterprises also like us because to conduct business meetings, they need a good supplier to make good arrangements for their travel.
And the citizens like Ctrip because after they buy a house, buy a car, they want to travel. So as long as we deliver a high level of service, provide the most comprehensive products and offer the best price, I think we will be able to serve the government, enterprise and individuals very well.
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(END) Dow Jones Newswires
June 14, 2017 02:47 ET (06:47 GMT)