Ctrip

"At the time, Ctrip’s online bookings were already in the tens of thousands and we were quite familiar with hotel sales across China. Many clients pointed out that Ctrip did not have enough booking options for budget hotels. And, unlike most hotels that seemed to have limitless room supplies, the most popular budget hotel, Xinya Star Hotel, allocated us only a few rooms. The supply-demand situation told us that there was a market gap in budget hotel supply. Our company decided to test the water by investing in budget hotels and appointed me to explore. This later led to the emergence of Home Inns."

"Our business model was hardly an earth-shattering innovation; we just followed Expedia’s model, by first creating content, then relying on hotel room and ticket bookings to take profit. That was an era when a good business plan was enough to attract financing. Our plan was not as exciting as a web portal but with the impressive qualifications of the four founders we were able to get some venture capital. The first tranche came from IDG, and from this beginning they’ve invested in the three enterprises I participated in founding: Ctrip, Home Inn and Hanting hotels. It just goes to prove that even in a crazy era there are smart people who understand what’s going on."

"The initial business model was hotel franchising, which is common in the West. We used Ctrip’s marketing power to attract three-star hotels to adopt the Home Inn brand. Though facilities, quality of service and pricing varied, we persevered with the brand. But the hotels had different operators and many hotels displayed two brands. This profit model brought in little income because brand identity was not distinguishable enough Also, financing was not smooth. Neil Shen and I visited numerous venture capital companies in Beijing, but it never resulted in anything. No one…"

"Bubble economies, whether the dotcom bubble or a real estate bubble, will always attract attention from the public and the media. Why not make use of the opportunity to promote oneself, increase name recognition and media exposure? During the inter-net bubble Ctrip was not as much in the limelight as web portals but it was well-regarded and a centre of focus for the media."

"From the outset of initiating the setup of Ctrip I had an absolutely professional team with James Liang establishing a solid foundation, Fan Min carrying it forwards, and Neil Shen dealing with the financial and legal aspects. I established the firm base for Home Inn, then Sun Jian took up the baton; I also initiated Hanting and established a solid base…"

"At an IDG investment meeting we suggested that investors stop focusing only on IT and high-tech industries and try some traditional fields. IDG was sceptical, with a let’s-give-it-a-try approach they again became our first investors. The key factor behind their investing in us was that they valued our personnel – the Ctrip team had…"

"The last tranche of financing for Ctrip was at about the time of the bursting of the dotcom bubble. We were concerned that we had insufficient cash reserves, so we sought even more financing. That’s why when the company began to be profitable, we had a lot of excess cash. The company decided to forge a new direction for investment to make best use of the excess capital – the cost of this capital was extremely expensive, having come from the dilution of the founding shareholders’ shares."

"Fourth, all three companies were the perfect marriage of entrepreneurial spirit and professional management. From the outset of initiating the setup of Ctrip I had an absolutely professional team with James Liang establishing a solid foundation, Fan Min carrying it forwards, and Neil Shen dealing with the financial and legal aspects. I established the firm base for Home Inn, then Sun Jian took up the baton; I also initiated Hanting and…"

"Fifth, all three businesses were a reformation of a traditional industry. Ctrip was transformed from a traditional travel agency to a modern travel service company. Both Home Inn and Hanting were upgraded from traditional hotels to modern hotel chains. These are…"

"The three businesses – Ctrip, Home Inn and Hanting – have much common ground. First, the actual business models were not entirely the same as those conceptualized at the time of the initial financing Ctrip moved from an online travel agency to hotel room bookings, while Home Inn moved from the hotel franchise model to privately owned and operated…"

"Second, each of the businesses required about three years to take shape. For Ctrip it was from 1999 to 2002; Home Inn 2003 to 2005; and Hanting from 2007 to 2010. In a similar manner to human development, the basic shape of these three businesses, their teams, structure, character and culture was formed in the first three years. Thereafter it was just a question of continued growth. Three years is a critical time for Chinese companies to reach a certain level to be able to enable significant future growth. This is because Chinese companies grow fast and there are many imitators and…"

"Meituan, which secured first place in the small group-buying market, has leaped into a vast new arena: O2O, Online To Offline. This connects consumers and merchants through the internet and mobile internet, cutting out high-loss and inefficient segments of traditional offline industries. The earliest representative of O2O enterprises would be Ctrip. Due to the development of smartphones and mobile internet in recent years, along with the improvement of mobile positioning and payment technologies, O2O has entered an era of explosive growth."