Ctrip's biggest challenge to Priceline and Expedia isn't in the U.S., it's in new markets. And right now Sun and her colleagues are moving fast to gain and keep advantage.
Jane Sun led two male colleagues into a Tokyo boardroom a few years ago, ready to hear a pitch from potential business partners. As was the custom, their hosts showered the men from China’s biggest online travel site with effusive praise. Sun, mistaken for an assistant, got nothing.
“I was chief financial officer but nobody shook my hand,” she said. “They turned around and walked away.”
That dismissal stung given Sun’s accomplishments, from a childhood scarred by social upheaval in China to leadership of Ctrip.com International Ltd., the world’s No. 2 online agency by market value. As the most prominent female chief executive officer of a listed Chinese technology company, she still bristles at the incidents of casual sexism she’s encountered from Silicon Valley to Ctrip’s home in Shanghai. They help spur a resolve not just to build an enduring global business, but also implement some of the most women-friendly hiring policies in the country.
Ctrip is little known beyond its home market and Sun’s betting she can fashion it from a big-in-China booking service into a one-stop platform for travelers from around the world. That’s why she was instrumental in orchestrating its largest-ever acquisition, a $1.7 billion deal for Skyscanner. Sun plans to integrate the U.K.-based price comparison service with Ctrip’s site “by the first part of this year.”
While online booking accounts for just 10 percent of China’s travel market, almost 80 percent of every internet travel transaction leads back to Ctrip, according to Bloomberg Intelligence estimates.
That’s given Sun a dominant position just as China is poised to become the world’s largest source of international travelers, sending as many as 200 million people abroad each year.
“Chinese tourists are very affluent. The most expensive tour we have on a per-person per-tour level is $200,000,” the 48-year-old CEO said. “It took us 17 seconds to sell out. So that tells you how strong the buying power is.”
But with size comes challenges, including accusations of monopolistic behavior. Last year the company agreed to tie up with fiercest rival Qunar Cayman Islands Ltd. to stem a bitter subsidy war. Ctrip, which is about 10 percent owned by rival Priceline Group Inc., is projected to post its first annual loss since listing on the Nasdaq in 2003, due largely to costs related to the Qunar deal.
Sun’s Rise at Ctrip
Though CEO only since November, Sun’s played a pivotal role in steering the company as first CFO, then co-president. During that time, Ctrip sank $180 million into India’s MakeMyTrip Ltd., hoping to replicate its success in another emerging market. It got into the cruise market in 2014 by buying its own liner. And it began targeting the Chinese countryside, where assembling one’s own vacations online remains a novel concept.
If those bets pay off, Sun says Ctrip’s market value could triple by 2020 to match the more than $75 billion now commanded by Priceline. She expects to handle as much as 2 trillion yuan ($291 billion) of transactions on its platform by 2021.
“Ctrip over the past 15 years has proven itself to be really good at creating products for travel,” said Chi Tsang, an HSBC analyst. But “five years is probably too soon for it to become the world’s most valuable.”
While 27 analysts rate Ctrip a buy, and none a sell, even the most positive pundit has only set a 12-month price target of $58 a share. That confers a valuation of $29 billion in 2018 — well short of Sun’s goal.
Sun’s early years didn’t mark her down for executive life. As the daughter of chemical engineers and cousin to physicists, Sun seemed destined for the careful plod of a research lab.
“After I watched my cousins working in a lab I thought ‘China is going to be a great country but it takes more than scientists to change it,”’ she said.
She joined Beijing’s Peking University in 1987 to study law, reading English books to expand her mind; the American classic Gone With the Wind is a favorite. Language skills got her assigned to translate for Joseph Little, a visiting scholar from the University of Florida. Soon after Little went home, students and protesters took to Beijing’s Tiananmen Square, marching for democracy. Sun wouldn’t comment on that movement. Little said it was during the chaos that Sun’s family turned to him.
Her “father called me at home one night and asked me if it would be possible to sponsor her to come to the U.S. for a visit,” Sun’s former mentor recalled.
Little helped get Sun into a summer program run by his colleague Fletcher Baldwin and wife Nancy that taught U.S. law to overseas students. Then 20, she took her first-ever flight to start a journey that would lead her to Gainesville, Florida.
In her 12th floor office in Shanghai’s Sky Soho, a futuristic office complex designed by renowned architect Zaha Hadid, Sun sits with her back to a panoramic wall-print of blue-domed houses off the Grecian coast, inviting a Santorini getaway. Her own maiden voyage was less exotic but no less memorable.
“We went to the grocery store and I remember clearly there was one moment when I was going to burst out crying,” she said. “I saw an aisle just for pet food and I thought ‘in my home country in the countryside a lot of people don’t even have food.’”
Working her way through college bussing tables for $3 an hour, Sun graduated from business school in 1992 and eventually joined KPMG. After a career that encompassed time at Applied Materials Inc., Sun accepted the job of of CFO at Ctrip in 2005 when her husband’s job took him back to China.
If Sun succeeds at growing Ctrip into one of China’s tech titans, there’s little chance she’ll ever be mistaken for a secretary again. Maggie Wu, a former KPMG co-worker and now CFO at Alibaba Group Holding Ltd., credits her close friend with blazing a trail for women executives and — importantly — showing how a Chinese company could be run.
“At the end of the day, it’s not about those who prepare everything for the young, but those who prepare the young people for the future,” Wu said.
While Sun describes Priceline and Ctrip as “very good partners,” sharing resources such as hotel inventory, they also remain competitors. Chinese travel is getting tougher with e-commerce giant Alibaba setting up its own travel service, while Meituan, backed by WeChat-operator Tencent Holdings Ltd., is also getting into discounted tours.
“The beauty of Meituan is it’s a high-frequency app that people click on every day for daily deals,” said Tsang, the HSBC analyst. “The amount of booking nights Meituan is doing is huge. It’s almost comparable to Ctrip and that’s causing a lot of investor concern.”
Challenging Priceline and Rivals
Ctrip’s answer is to expand into rural China. In 2016 it acquired Traveling Bestone, a chain of 5,000 agencies in lower-tier cities. It also intends to market its brand to Asian other Asian markets such as South Korea while turning Skyscanner from a price-comparison website to a full travel platform. Sun said she didn’t expect to make another investment on Skyscanner’s scale in the next two years.
Skyscanner, which checks other websites to show users the cheapest travel options, will operate independently but have its search engine intertwined with Ctrip’s booking services, starting with flights and train rides and eventually hotel rooms. She’s already prepping her troops for a larger stage, telling executives to run presentations in English.
“Ctrip’s key market is still in the Asian region,” Morningstar Investment Service analyst Marie Sun said. “So in the near term there’s not that much competition between Ctrip and Priceline.”
Combined with this is a push to keep females in the workforce, something she said will be key to success. While Mao Zedong once said that women hold up half the sky, just 1.4 percent of Chinese-based listed companies today have a female CEO or its equivalent, according to data compiled by Bloomberg.
In contrast, Ctrip’s heads of strategy, finance, investor relations and operations are all women. On the ground floor near their Shanghai headquarters is a daycare center where kids nap beneath collages of palms and rockets. Because Chinese women are often expected to head back to their home-towns to raise a family, it sets up rural satellite offices where there’s a need.
“As a female executive you really feel a lot of responsibility,” Jane Sun says from a desk that overlooks the very Shanghai airport from which she first left the country in 1989. “When much is given, much is expected.”
This article was written by Bloomberg News from Bloomberg and was legally licensed through the NewsCred publisher network.
Photo credit: Ctrip CEO Jane Sun, pictured here, has implemented some of the most women-friendly hiring policies in China as Ctrip expands in Asia, Europe and English-speaking countries to compete with rivals like the Priceline Group. Ctrip