Ctrip’s lack of adaptability, technology and innovation was becoming more and more obvious.
Even a subversive innovator can become complacent over time. James Liang, co-founder of Ctrip, recalls the early days of his groundbreaking company and explains what had to change to ensure a successful future.
What are some differences you see in online travel planning in China compared to other nations?
In 2013, China’s online travel market was worth USD $28 billion, which accounts for less than 10 percent of the overall travel industry. However, there is a possibility this will increase to 50 percent by 2020.
Currently, the average per capita spending of Chinese tourists is less than one-tenth of that of American tourists. We believe that in the future, the average per capita spending in tourism from China will exceed that in other industries, such as mobile phones, etc.
Therefore, the potential of online travel market indeed surpasses other online travel markets overseas and e-commerce enterprises of other industries in China.
How do you balance tradition with risk-taking when running a business?
Ctrip had remarkable success in sales during 2007 to 2009. Since then, I have analyzed the difficulties we have encountered in the past two years and found that there has been a lack of notable changes or improvements.
From a business perspective, Ctrip was based on the collective operation mode, based on traditional enterprises, instead of creativity or adaptability. With new technology available, Ctrip’s lack of adaptability, technology and innovation was becoming more and more obvious.
What are some of the innovations you’ve implemented in Ctrip?
Entrepreneurship can be put into practice in many aspects. For instance, I have divided Ctrip.com into many small companies, each with multiple departments for specialized affairs, granting the business departments or the CEOs full authorization. In this way, every company is able to compete with other startups with more flexibility in operation, along with the sound resources and platform of Ctrip.
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Looking back at your career, what was the one moment that led you to where you are today?
The key point of my undertaking was definitely May 1999, when Qi Ji, Nanpeng Shen, Min Fan and I co-founded Ctrip.com. The initial aim of Ctrip was to be both a travel service enterprise armed with advanced technology and an online travel supermarket. We were subverting the traditional Internet and tourism businesses.
If you could dedicate time to another project, what would it be?
I would love to pay more attention to the study of demographics, and observe the adjustment of China’s population policy. I hope our research on this issue will make a difference in the decision-making processes that are held by political organizations, and let them know it might bring a significant impact to China’s future.
What do you think are the biggest problems facing Asia Pacific nations today, especially with tourism growing so rapidly?
There is always the issue of online companies not making money. However, tourism is a high-growth industry in China. This issue could be solved if the participants in the tourism industry possess technology backgrounds as well as some experience in a traditional travel agency. There is more opportunity in this market if technology and traditional methods can be integrated.
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