The price war between Fliggy and Ctrip

In this depressed spring, there are still some bosses who are quietly shopping for goods.

On April 25, Caesars Tourism Industry announced that it plans to raise 1.1 billion yuan through a non-public issuance of shares. The five issuers involved in this non-public offering are Wenyuan Fund, Suqian Hanbang, China Life Insurance, Shanghai Licheng and Qingdao Haotian, all of whom subscribed for shares in cash.

Interestingly, Suqian Hanbang is a wholly-owned subsidiary of JD.COM Group. After the issuance, it also exchanged 450 million yuan for 7.37% of the shares of Caesar Tourism Industry. In other words, JD.COM has now become a veritable major shareholder of Caesars Tourism Industry.

In the face of the epidemic, the tourism industry, which has frightened many investors, has become a hot cake in JD.com. Communicator eyes. What's the logic behind this?

First, we start with JD.COM itself. From the earliest air tickets and hotel accommodation business to today's attractions, visas, guides, tour groups, etc. We can see JD.COM’s continuous expansion in the tourism field. But a very realistic situation lies ahead: amateurs are still amateurs after all, and the all-round layout of the tourism industry chain is still a big problem.

The emergence of Caesar Travel made this breakthrough possible.

Data from the top ten most influential travel agencies in 2018 show that Caesars Travel ranked 7th with a comprehensive index of 71.8. What is this concept? There are thousands of travel agencies, large and small, across the country, which shows how powerful they are.

Now for JD.COM, the alliance can increase the layout of the entire tourism industry chain, which will lay the foundation for JD.com to a certain extent. COM's self-operated tourism business. The Caesars travel industry can better utilize the JD.COM platform to develop its own business. In fact, it is a "win-win" result.

In addition, as the COVID-19 epidemic is gradually contained in China, the tourism industry is also recovering quickly. This is a good opportunity for JD.COM to strategically invest in the Caesars tourism industry.

Looking back, let’s take a look at JD Travel. Everyone has seen the development in the past few years, but behind this development, I don’t know that this layout has actually taken root from the beginning.

This is a very subtle move!

No one would have thought that as early as 2011, JD.COM would be associated with the tourism industry.

J.D. COM officially launched the air ticket booking business in early 2011, which also marked JD.COM's official entry into the tourism field. Subsequently, it acquired the online hotel booking platform "Tonight's Hotel Specials" in a cash and stock deal.

According to official statistics at the time, in the first half of 2011, the number of domestic tourists reached 1.3 billion, an increase of 10%, and domestic tourism revenue was approximately 900 billion yuan, an increase of 20%.

JD.COM saw this business opportunity very early and decisively entered the tourism industry. Here, I have to admire Liu's vision.

In the process of development, JD.COM tourism has tasted both bitter fruits and sweet spring water.

In 2014, JD Travel was officially established.

The most important event in JD.COM tourism is that in May 2015, JD.COM *** invested US$350 million to subscribe for Tuniu shares, including US$250 million in cash and US$100 million in resources and operational support. .

At that time, Tuniu was mainly engaged in travel and vacation products, with a market share of 17.6% for group tours, ranking first in the domestic group tour market. This shows that Tuniu has great competitive potential in the market.

J.D. COM spent huge sums of money gambling, which is obviously a one-sided transaction. However, man's calculations are ultimately not as good as God's calculations. Under the influence of fierce external competition and internal disputes, Tuniu's advantages have long been lost.

Tuniu’s successive losses have also triggered a chain effect. As of the close of U.S. stocks on April 24, Tuniu’s total market value was only US$107 million, while JD.COM’s indirect losses reached US$277 million.

The failure of this investment also made JD.com stronger. COM is determined to do self-operated tourism business.

And the air tickets and hotels must be self-operated, and at the same time, more travel directions must be explored.

Establishing a travel company is nothing more than sending a signal to others: I now want to run my own travel business and do not want to be dependent on products from other channels.

I have a showdown!

JD’s layout. COM’s travel field is not too early either. There are Ctrip, Qunar, and Fliggy’s “future hotel.” As a latecomer, how is JD.COM preparing to break this trend?

As we all know, as early as 2017, Liu proposed the strategic direction of "unbounded retail", the core of which is to connect users, scenarios, supply chains, and marketing. On this basis, JD.COM can also reconstruct the people, goods, and markets of the tourism and hotel industry, and re-empower its own tourism industry.

For example, when business people travel on business, they are often not very satisfied with the traditional hotels they look for directly offline. At this time, the accurate big data of online platforms can more accurately create a good accommodation environment for you, which has a great impact on consumers' consumption experience, and JD.COM takes advantage of this.

In fact, it means expanding from consumption scenarios, from offline to online, and then back to offline experience. This is similar to Liu’s layout in the logistics direction. Everything is user-centered.

Therefore, judging from Liu's strategy, the future development of the tourism industry will open up with the help of unbounded retail.

J.D., on the other hand. COM’s biggest rival in the tourism industry is its big brother Ctrip. Ctrip was among the first to enter the tourism industry, so it was also the first to taste the benefits. In the past two years, Ctrip's strategic purpose has been very clear, which is to vigorously deploy new retail. As of now, it has more than 2,400 offline stores in 26 provinces across the country, including more than 300 stores in Guangdong.

Of course, we cannot abandon the flying pig. As Ali's flying pig, he naturally enjoys the various benefits brought by Ali, and of course inherits Ali's vision. Therefore, Fliggy is attacking hard at home and abroad.

Now, in the face of market competition among giants, JD.COM currently has little benefit for the time being, but no one can say for sure in the future, so let’s leave the answer to time! Related questions and answers: