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Alibaba rebrands online travel arm

2014-10-29 08:51 Global Times Web Editor: Qin Dexing

Alitrip takes over from Taobao Trip, will provide more services like car rental

China's e-commerce giant Alibaba Group announced Tuesday that its online trip business will operate independently under a new brand, in an attempt to expand further into the online travel business after four years.

The businesses of Taobao Trip, a flight and hotel aggregator under Alibaba's e-commerce website taobao.com, are being upgraded and transferred to a new brand Alitrip, according to a press release e-mailed to the Global Times.

Alitrip will focus on trip services during holidays, including air ticket booking and auto rental, which was not offered by Taobao Trip.

Taobao Trip was launched in 2010, but has a relatively small market share in the country's online market.

"Its (Taobao Trip's) ranking in the online trip market wasn't even in the top 10," Ma Tianjiao, an analyst at Internet consultancy Analysys International, told the Global Times Tuesday.

In the second quarter of 2014, Ctrip, one of China's leading online travel agencies (OTA), accounted for 51 percent of the total market share of online travel agencies, while eLong Inc, another leading Chinese travel booking website, accounted for 8.2 percept of the total share, according to data released by Analysys International.

Ma noted that the launch of Alitrip will not likely have a big impact on China's current online business market, as leading online travel service providers such as Ctrip have stable business operations in hotel booking, air ticket booking and ticket sales for places of interest.

But Alitrip also has a few advantages, such as a huge database of users that Alibaba has accumulated, as well as its strong travel information search engine, said Ma.

"The online trip market in China is big enough, as consumer demand is broad. Alitrip doesn't need to grab existing market share from other competitors but can try to meet the diversified demand of consumers [in new areas]," Li Shaohua, general manager of Alitrip, said in another statement that Alibaba e-mailed to the Global Times Tuesday.

Concerning possible competition from more market players such as Alitrip, Yan Xin, public relation manager at Ctrip, told the Global Times on Tuesday that "Ctrip has its own advantages in service and technology, which are not reproducible."

Yan also noted that Qunar, which operates an online travel search engine, is Alitrip's major rival.

The competition in the online tourism sector has been intense with companies trying to attract customers with tactics like major price discounting and promotions.

For instance, eLong waged a major promotional battle with its major competitor Ctrip in December 2013.

The CEO of eLong Cui Guangfu started by claiming on his verified Weibo account that if ctrip.com offered a 10 percent discount like eLong, eLong would offer rewards worth 240,000 yuan ($39,528) to its customers, and he also invited Ctrip CEO Liang Jianzhang to join the contest.

In addition to price wars, market players have even confronted each other in court.

In June 2011, Qunar.com Inc accused Ctrip of deceiving consumers and of malicious business practices. It also sued Ctrip again for defamation in May 2012.

The intense competition among the major market players has taken place continuously in the past few years.

However, analysts say the companies could diversify their businesses and services to attract more travelers.

Currently the major market players mainly focus on three areas - transportation, hotel booking and tickets to places of interest, but "they could do more," Zhang Yi, CEO of iiMedia Research Institute, an Internet consulting agency, told the Global Times.

Zhang noted Tuesday that more tourists, especially younger ones, these days would like to enjoy tailor-made services such as special catering and living in homes of local residents.

As such, online trip agencies "could do more" in this regard, said Zhang.

Cooperating with each other might sometimes be "a win-win solution," according to Zhang.

Ctrip and Qunar started cooperating in 2013 in a bid to jointly strengthen their online tourism businesses and compete with other market players.

In August 2013, Qunar's website began to promote tourism products offered by Ctrip as the main aspect of cooperation between the two companies.

Alibaba also made a strategic investment in Qyer, a Chinese tourism website providing travel guides and online forums, in July 2013 to expand its business in the online trip sector.

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