Skift Take

The deal shows the pragmatism of Priceline Group's new CEO toward China. Glenn Fogel chose to sync up with an additional local player rather than rely just on its existing partnership with Ctrip.

Meituan-Dianping, a Chinese e-commerce platform, aims to expand its other fast-growing lines of business in hotel reservations, ride-hailing, and restaurant bookings thanks to a fresh round of investment.

The Beijing-based company has raised $4 billion in investment, it said on Thursday. Past investor Tencent, the messaging-and-games giant, led the round.

Priceline Group participated in the round with a $450 million investment.

Our source said that there would be a commercial agreement where Priceline Group’s Asia-focused Agoda brand would cooperate with Meituan-Dianping’s Travel & Leisure division, one of four divisions at the company. The division sells lodging and transportation for domestic and international travel to Chinese consumers. It booked more than 18 million room nights of accommodation bookings in July alone.

The deal with Agoda will be similar to’s arrangement with Ctrip, according to the source. For reference, anywhere between 60 and 80 percent of Ctrip’s non-China hotel inventory comes from

Adding Agoda’s overseas inventory could be a boon for Meituan, which today only has about 200,000 foreign hotels listed on its platform.

UPDATE 9:15 am ET: Priceline has filed a form with the U.S. Securities and Exchange Commission that confirms the above details we reported earlier.

Todd Henrich, global head of corporate development at Priceline, said in a statement, “We are excited to support Meituan-Dianping, the well-recognized leader in China’s local services industry. Our commercial relationship between and Meituan-Dianping will help each company benefit from the other’s expertise and capitalize on the opportunities presented by China’s exceptionally large travel market.”

The latest funding places a valuation of more than $30 billion on Meituan-Dianping.

New CEO’s First Move

Glenn Fogel became chief executive of Priceline Group at the start of this year after a long career in corporate development for the company that included acquisitions of Agoda and and a strategic stake in Ctrip, China’s largest online travel agency.

In September, Fogel said that Asia was a key immediate growth area for his company  while speaking at Skift Global Forum in New York. He said that Agoda is performing well throughout Asia.

Meituan-Dianping was born from the merger of Meituan, a food delivery and group buying company, and Tencent-backed Dianping, a restaurant review app. The company now calls itself China’s third-largest online consumer marketplace after Alibaba and JD. It claims a user base of more than 260 million shoppers.

Its consumer marketplace brands offer a mix of Yelp, Groupon, Open Table, and Uber-style business models for more than 200 various goods and services. For example, it says its brand Maoyan Weying is China’s largest online seller of movie tickets and restaurant reservations.

Its travel and leisure business debuted in 2013 but was formalized this spring as the Meituan Travel brand.

The latest funding piles onto past mega-rounds. In 2016 it raised more than $3.3 billion.

Spreading Its Bets

Priceline has now opened another flank in its battle in China. It already was making advance via its deals with Ctrip — which controls at least half of China’s online travel market bookings if you include its 45-percent owned partner Qunar.

Priceline holds slightly more than four percent of Ctrip’s equity. When adding in its convertible debt stake, that stake hits nine percent, as Skift Research noted in its 2017 deep dive into Priceline’s competitive position.

The current agreement allows Priceline to own up to 15 percent of Ctrip.

It is notable that Priceline Group chose to spend its cash on expanding its portfolio in China rather than investing further in Ctrip, which is almost unprofitable after stock-based compensation is taken into account.

From the outside, it appears that this deal is primarily about Priceline both hedging its bets in China and broadening its commercial relationships.

While benefits from the Ctrip arrangement, Agoda will benefit from the Meituan commercial relationship — leveraging different inventory on different marketplaces, according to the source.

The inventory itself also differs. Ctrip has a lock on many chains and high-end properties in so-called “first-tier” cities like Beijing. In contrast, Meituan says it has more than 340,000 domestic hotels, which tend to be below that top-tier properties and tend to be located in cities that are not as large — and where Ctrip and its sister brand Qunar have not made as many in-roads.

More broadly latest Meituan-Dianping funding reflects a broader battle between China’s major tech players for dominance between tech giants Tencent and Alibaba.

Tencent’s arch-rival Alibaba had an early stake in Meituan-Dianping as well. But it is unclear if the company has diminished its stake as of this round. Alibaba also sells travel via its Fliggy brand and lets users pay with its Alipay service.

As for Priceline, this may be just the opening gambit by Fogel. His company may seek additional foreign investments and acquisitions. It recently was sitting on a large pile of cashthat has kept growing this year. Some of the cash has been earned overseas and, some have previously speculated, may be best deployed overseas rather than repatriated to the U.S.

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Tags: ctrip, Meituan-Dianping, priceline

Photo credit: Meituan-Dianping touches the travel business in several ways. One example is Hazelnut B&B, a bed and breakfast app offering thousands of accommodations in Beijing, Shanghai, Guangzhou, and other Chinese cities. Meituan-Dianping's Hazelnut B&B

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