It felt like I was going to a rock concert. The night before, on a cruise on the Huangpu river, the city lights were in full blaze but one illumination stood out, the Pearl Tower lights announcing that Ctrip was turning 20 – a city paying homage to its homegrown Internet giant.
This morning, there were queues outside the Shanghai Expo centre. Security lines were long. Inside the cavernous hall, dozens of strobe lights danced around and a huge curved LED screen showed continuous videos of travel leaders from around the world congratulating the travel giant’s coming of age. From Poland to Portugal, from Singapore to Spain, they spoke of the change Ctrip had brought to their destination.
The hall was full of anticipation as we waited for the proceedings to begin – it takes a while for 3,000 people to be seated. After all, this is a big moment not only for Ctrip which began in a restaurant somewhere in Shanghai two decades ago when four friends decided to get together to start an Internet travel business but also for China’s travel industry.
This is a company that’s gone from four founders to over 40,000 staff (5,000 outside China), from a business that was purely local to one whose income from global business now accounts for 36% of volume, and from one with US$400,000 in sales in the early years to one which reported $1.3b net revenue in Q2 2019, a 19% year on year growth. Trip.com Group now includes the following brands – Trip.com, Ctrip, Skyscanner and Qunar – as well as has a majority stake in India’s leading OTA MakeMyTrip.
In an elaborate and well-executed ceremony, lasting three hours, it changed its name to Trip.com Group, announced its intentions to be the leading travel brand in Asia in three years and to be the leading international travel brand globally by 2025, and to be the undisputed, most valuable and respected leader in online travel by 2030 with the best technology, best service and largest market share and most recognised brand.
Said James Liang, chairman and co-founder: “We are not old. Our future starts now.”
Sentimental tales of the early days
Earlier, he shared the stage with his three fellow co-founders as they were interviewed by CEO Jane Sun who presented each with a gift reminding them of their early days – from an employee pass that said No. 4 to the first investor term sheet and the first filing document on NASDAQ. It lent a somewhat sentimental, personal touch to the proceedings as the four founders shared their memories of the early days – of “cables everywhere”, “working on the floor”, the “ups and downs” of the business and “playing bridge in the afternoons”.
Liang was presented with the first book he wrote on the changing demographics of China. “I remember people were willing to join us because they had read the book,” he recalled.
The four founders were bullish on the future, with statements such as “the next 20 will be splendid, “no one can compete, we have served millions of travellers”, and “this is the golden age of mobile Internet with Asian countries rising, even Africa is rising”.
Star power to philosophy as Liang speaks of “holding hands” and “mental needs”
Sentimentality and bullishness gave way to star power when Taiwanese actor Eddie Peng appeared to the screams of young girls in the audience. Peng, who’s Trip’s new ambassador, encouraged young Chinese to travel, to climb mountains, to get new experiences, “not just surf the Internet”.
In his speech, Liang said that while the group had taken on a new name, it retained a meaning that’s close to the original Chinese translation which meant “holding hands” or “companions”. “It means a bunch of people coming together to create something good,” he said, referring to companies it had invested in such as MakeMyTrip and Skyscanner.
It was interesting to observe the contrast between the professorial and philosophical style of Liang and the no-nonsense business approach of Sun. In his speech, Liang spoke of travel as “the only material good that satisfies mental need”, “linking physical and mental world” and “to keep humans interested in exploring physical reality and prevent degenerative virtualization”.
Travel, he said, promotes exchange, reduces inequality and enhances innovation. “People will stop buying new cars one day but they will not stop needing mental growth.”
Trip vows to grow inbound with “friendly” image and panda mascot
He declared the group’s new mission of growing inbound tourism. Noting that in most countries, inbound tourism as a contribution to GDP was usually between one and three percent, China’s was 0.3%, the lowest among major economies. Calling it China’s biggest weak spot, he said just a shift to one percent would produce $100b to $200b growth.
“This results in a lack of soft power and huge deficit in education sector and ability to attract talent.”
Picking out the pain points as visas, Internet access, payments and lack of English, he said it was impossible for visitors to shop because stores do not accept cash anymore and that the group would work with governments and partners to address this problem.
China also has an image problem, he said. It is vague with no strong selling point, it is deemed not safe and heavily polluted, it is perceived to be distant and strange, strong but unsociable and “for some people, threatening”.
He said the group would work on the positioning of “friendly China”, use the panda as a mascot and leverage on the 100m overseas users of its overseas brands, Skyscanner and MakeMyTrip, to bring visitors to China.
G2 equals great service and globalisation
Liang also announced a new G2 strategy around great service and globalisation, built around scale, mobile, multi-product and platform. With 80pc business already on mobile, it had the first mover advantage and it would leverage its leading position in air tickets to sell cross-sell other products and services.
Sun then came on to share numbers from its Q2 2019 report, which showed growth across all sectors from accommodation to transportation, packaged tours and corporate travel and in its global business, she said, Trip.com has been achieving 3-digit growth for 11 consecutive quarters; Skyscanner’s direct booking has been growing at three-digit rate and it was seeing more than double international accommodation volume growth.
MakeMyTrip’s Kalra adds India might to the equation
Deep Kalra, chairman and group CEO of MakeMyTrip (MMT), also took to the stage to enlighten the audience about the Indian market which he said had similar characteristics to China – “high growth segments”, “mobile first” and “fragmented hotel market with 90pc independent”.
Declaring “the best is yet to come”, Kalra spoke of the combined might of India and China. The two countries cumulatively contribute 40% of global GDP growth and while Ctrip’s advantaged supply will help MMT gain share in India’s outbound, it also meant MMT could also play a big role in Trip’s inbound mission.
With India poised to be the top fourth outbound market by 2025, and flights such as Delhi-Chengdu now available, he said there were opportunities for Indian travellers to visit China. “We haven’t even scratched the surface”, and MMT would dial up hotels with vegetarian food options or near vegetarian restaurants. “Through technology, we can solve the two biggest pain points of Indian travellers to China – food and language.”
With Liang declaring that “our mission stays the same, to make every trip perfect and now we are aiming for the global market”, he said it would “act local, think global” or “glocal”, as Xing Xiong, CEO of Trip.com, described at its first airline partner conference held the day before, the first all-English event to be organised by the group and attended by 120 delegates from 24 countries.
Indeed, the two days were full of symbolism such as this as a local power takes on a global face – videos that went from loud and bright, to a gentler and softer-toned feel, and the closing which culminated in a group photograph to capture the new glocal giant, Trip.com Group.
Happy 20th birthday, Ctrip. Here’s to changing travel and Asia.
• All photos credit: Trip.com