China’s Ctrip buys train ticket app Suanya for US$16 million to tap commuters, mobile internet users
Ctrip, China's biggest online travel agency, announced this week its purchase of train-ticket-booking app Suanya for 100 million yuan (US$16 million), one of a number of deals aimed at expanding its reach in the booming domestic and outbound travel market.
Nasdaq-listed Ctrip, which is based in Shanghai, has already been offering train ticket bookings, but these have hitherto focused mainly on leisure travel.
Its acquisition of Chinese app Suanya, which was announced on Wednesday, should help it further corner China’s commuter market while drawing more of the country’s growing ranks of mobile internet users to its general travel site.
Booking a train ticket in China can be fraught with problems due to the availability of seats on certain routes, times and festive periods, a clunky, government-run official booking site, and finicky logging-in details.
Ticket sales are regulated by the central government and can only be purchased via 12306.cn, a state-owned website.
But the site has come under attack for its poor user interface and inefficiency, creating an attractive niche for user-friendly apps like Suanya to step into. Suanya also offers a feature reminding users once their desired ticket becomes available.
Wednesday’s announcement comes after a series of deals by Ctrip to tap mobile users and other market demographics.
In 2013, it made a strategic investment in Chinese hotel booking app Fast Hotel Manager for an undisclosed sum to give it access to the latter's vast network of travel accommodations.
As Chinese tourists slowly take to the cruise industry, the company moved last September to acquire a passenger cruise ship from Royal Caribbean Cruises.
This January, it finished snapping up a majority stake in the UK’s Travelfusion, a travel distribution system with a global network of online travel agencies and self-booking tools, which also has a base in Shanghai.
And in May, Ctrip’s owner Priceline, a leading US online travel agency, said it would invest a further US$250 million in the company as Ctrip keeps spreading its tentacles wider and the allure of Chinese tourists' spending power remains undimmed.
This week’s move tracks continued growth in the domestic rail travel market.
According to China Railway, passenger traffic nationwide surpassed 1.2 billion in the first half of this year, marking a 9.1 per cent jump from the corresponding period in 2014.
Ctrip’s first quarterly report of this year also shows a huge jump in downloads of its mobile app, which reportedly climbed 550 per cent from one year earlier to stand at a cumulative 800 million downloads.
Mobile channels accounted for 70 per cent of all the online transactions it processed during the period, the report said.
The company's transportation ticketing services by volume grew 104 per cent year-on-year, with ticketing revenues rising 46 per cent, said CEO James Liang.