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China's online tourism sector may see more integration, acquisitions

By Wang Wen (China Daily) Updated: 2014-04-12 07:20

China's online tourism sector may see more integration, acquisitions

Tourist board a Finnair flight at the Xi'an airport.The online travel industry in China may see consolidation this year. Yuan Jingzhi / For China Daily

Alibaba launched its own travel platform in 2010 and invested in March about $15 million into Byecity.com, an online agency focusing on outbound travel.

In 2013 it bought shares of qyer.com, an online travel information and service provider.

China's online tourism sector may see more integration, acquisitions

To boost its performance and compete with the other two, Baidu would like to buy shares in Ctrip.com but neither Ctrip.com nor Qunar.com is motivated to to merge, Wei said. Ctrip.com is already the industry leader with healthy cash flow and Qunar.com, which listed at the end of 2013, also has its own development plan, he said.

"A merger means the two companies have to cut some overlapping business and neither wants to do so," he said.

But Ctrip.com's mainly institutional shareholders may not refuse a good offer from Baidu. Swallowing a rival is also attractive for Ctrip.com, Wei added.

Ctcnn.com figures show Ctrip.com had a 23.3 percent market share in 2013 and a possible merger with Qunar.com, China's largest travel search engine, may deliver a monopoly, some analysts said.

"It is definitely a thunderclap for the small and medium enterprises and the whole online travel industry," said Wang Tingting, an analyst from iResearch Consulting Group.

The Ministry of Commerce needs to investigate a possible merger and whether it will lead to a single company dominating the market, Wang said. Ways may be found to avoid any monopoly investigation, he added.

China's online tourism sector may see more integration, acquisitions

China's online tourism sector may see more integration, acquisitions

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