Merger could be ticket to success for Ctrip, Qunar

By Wang Wen (China Daily) Updated: 2014-04-18 07:21

The market capitalization of eLong was only $537 million on Thursday, while that of Ctrip was $7 billion.

But the combined hotel booking business of Tongcheng and eLong in 2013 was almost equal to 80 percent of Ctrip's hotel business, Cui said.

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"We can provide various services in the hotel booking market after we start cooperating and beat Ctrip in this segment of the market," he added.

The development of mobile terminals also makes it easier to succeed in segmented markets, Cui said, as consumption is being fragmented and consumers can easily buy travel products on their mobile devices.

Cui said market share remains a priority for eLong, and it will continue pursuing a larger share "at any cost", including price cuts.

Wu Zhixiang, CEO of Tongcheng, said that Ctrip's goal of expanding into scenic spot bookings pushed him to agree to the cooperation pact.

Although both Cui and Wu denied that their common investor - Tencent Holdings Ltd - had any role in the cooperation, it's still viewed by many in the industry as an "arranged marriage" by the Internet giant.

"It is necessary for smaller online travel agencies to form alliances to compete with the industry leader, especially when their investors are pushing," said Wei Changren, general manager of Ctcnn.com Inc, an analysis firm that focuses on the travel industry.

It's also possible that Baidu is pushing the merger of Ctrip and Qunar, Wei said, as it seeks another method to compete with other Internet giants in China.