Skift Take

Ctrip – with the help of some useful allies – continues to dominate China's fast-expanding travel industry. It will be interesting to see whether 2018 brings further expansion into Europe and North America.

Two of China’s mid-tier online booking sites, Tongcheng Network and eLong, have agreed to merge.

Ctrip, China’s largest online travel agency, and tech firm Tencent, the owner of WeChat, will be the major strategic shareholders of a new, enlarged Tongcheng-Elong.

Ctrip’s announcement said the new entity would “provide wider traveler coverage and deliver greater online travel services and products.”

James Liang, Ctrip’s co-founder and executive chairman, will serve as the new company’s co-chairman along side Tengcheng co-founder Zhixiang Wu.

Ctrip has a long history of involvement in both companies. Ctrip invested in eLong in 2015 when it bought a 37.6 percent stake for around $400 million (that deal also signaled the end of Expedia’s control of eLong.

Ctrip’s investment in Tongcheng dates back to April 2014, when it paid $200 million to become the second largest shareholder.

In 2016, parent company Tongcheng Tourism (also known as was split into two units, Tongcheng Network and Tongcheng Travel Agency Group. The former covers domestic air ticketing, train ticketing and other transportation while the latter deals mostly with package travel.

The new Tongcheng-Elong will be a significant beneficiary of Tencent’s involvement thanks to its ownership of WeChat, which not only is a huge source of traffic but also allows online payment through its wallet technology.

“Tongcheng-Elong is a strategic partnership which Tencent has built within its healthy Internet ecology system. We will continue to support the business and the development of the new company through the WeChat and QQ platforms on mobile, enriching online and offline products and services for customers,” said Liu Chiping president of Tencent.

The transaction is subject to closing conditions and regulatory approvals.

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Tags: china, ctrip, elong, tencent, wechat

Photo credit: Ctrip's James Liang. The company's co-founder will serve as co-chairman of Tongcheng-eLong. Qilai Shen / Ctrip

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