Investing in Japan
Ctrip, the largest online travel agency in China, established Ctrip Japan in Tokyo in 2014. The company is working to expand its operations in order to meet the needs of the quickly increasing number of Chinese visitors to Japan.
Ctrip is an online travel agency established in Shanghai, China in 1999. Users can book hotels, flights, package tours and more via the company’s website or smart phone application. It was listed on the NASDAQ (American stock exchange) in 2003. Currently, the company is one of the largest travel agencies in China with 250 million members mostly in the mainland, 17 locations throughout the country including Beijing, Guangzhou and Shenzhen, and approximately 30,000 employees.
In order to meet the needs of the quickly growing number of Chinese visitors to Japan, the company established its Japanese arm, Ctrip Japan in Tokyo in May 2014, and has been working to expand its operations in Japan.
Start of operations in Japan
According to the Representative Director of Ctrip Japan, Mr. Liang, it was 2007 that Ctrip began sending Chinese tourists to Japan. At that time, group tours were the mainstream but from around 2012 the needs for independent travelling to Japan significantly increased due to the more relaxed visa requirements for Chinese citizens and the other factors. And the fact that Tokyo was chosen to host the 2020 Olympics made the company decide to start operations in Japan. “There will come a time when many Chinese people go FIT (foreign independent travel).” Ctrip saw a business opportunity there. It started preparing for operations in Japan in 2013, and established its Japanese arm in 2014.
Currently the new subsidiary functions as the point of contact for negotiating with Japanese companies such as hotels, tourist facilities and airline companies throughout Japan, and supports the headquarters in China. Given the sudden boom in tourism to Japan, Ctrip Japan has been going into more partnerships in addition to those already established by entering into direct contracts with hotels and other travel-related companies.
Strengths of Ctrip
In China, due to the rapid economic growth and appreciation of the Chinese yuan, needs for independent travelling have been increasing, but many Chinese travel agencies had mostly been focusing on group tours instead. This situation helped Ctrip grow to have an overwhelming 68% share in the Chinese independent travelling market. It has 250 million members mostly in locations along the coast such as Beijing, Shanghai and Guangzhou which are experiencing dramatic economic growth, and in 2014 the company became the largest travel company group in China, exceeding major national travel companies.
In addition to the “overwhelming share,” Mr. Liang cites “a flexible company culture” where it can adapt to changes of the times, as another strength. Given that, until around 2005, 70% of travel-related bookings were made via call centers, Ctrip had a call center with 13,000 operators—one of the largest operations in the country. However, as Chinese citizens became more heavily dependent on smart phones for consumer activities, the company dramatically changed its business policy and promptly released a smart phone app. Currently, 40% of bookings are made via this app and 30% via their website, exceeding bookings made through the call center. Mr. Liang says, “Our ability to indentify Chinese consumers’ needs and to flexibly make changes in our business is one of the strengths of Ctrip.”
Ctrip’s website (”Visit Japan” page)
New initiatives in Japan
Ctrip has started new initiatives in Japan as well. One of them is the souvenir shopping service being provided in partnership with the Japan Post Group, which enables users to order items online before travelling and have them delivered to their hotels to save them on time spent shopping while travelling. Chinese tourists’ enthusiasm for shopping while in Japan has even been referred to as “the Chinese shopping spree” in the news. As many Chinese tourists know what to buy for their relatives and friends before visiting Japan, the company decided to launch this service and it has been well-received.
Another new initiative is the enhancement of ground services. The company established a new department called Destination Services Department, which collects information for tourists such as that on restaurants, sightseeing spots and optional tours throughout Japan, and sends it out on the website and smart phone app. This department was set up because many independent Chinese travelers who cannot speak Japanese and are travelling in Japan without a tour guide are having troubles as local information is not available for them.
Japanese food is particularly popular among Chinese, so the company places importance on collecting restaurant information. Its restaurant booking service has been well-received as users can choose a restaurant comfortably while looking at specifically presented prices and details of each menu item, so the company is increasing the number of partner restaurants. According to Mr. Liang, Japanese companies used to provide services only for Japanese people, but their attitudes have been changing dramatically over the past few years, and it has recently received a request from a high-end restaurant hoping to create set menus just for Chinese tourists.
Difficulties setting up operations in Japan and support from JETRO
When the company established its Japanese arm, the JETRO Invest Japan Business Support Center (IBSC) lent temporary office space and provided various support to the company, including consultation on incorporation in Japan. Mr. Liang said, “We had difficulties when opening a bank account in particular, but succeeded thanks to the support from JETRO.”
The company is eager to increase the number of employees, actively disperse information through the media and build its recognition as it expands business in Japan. Also, as more foreign visitors to Japan express a desire to travel to countryside, in addition to large cities, it is determined to work together with local governments to improve the environment of those areas to cater to accommodate them.
Mr. Jianzhang Liang,
Representative Director of Ctrip Japan
(June 2015 Interview)
|1999||Ctrip begins operations in China. Boasts largest number of hotel bookings in China by October.|
|Dec 2003||Listed on NASDAQ (American stock exchange)|
|Nov 2007||Launch of English website|
|Mar 2010||Launch of mobile website|
|Mar 2012||International flight booking platform renewed. Overseas hotel booking website launched in August.|
|May 2014||Establishment of Ctrip Japan|
Ctrip Japan (Japanese base)
|Business:||Provision of various travel-related services via the Internet and smart phone app|
|Parent company:||Ctrip (China)|
|Address:||9F, PMO Nihonbashi Kayabacho Bldg. 3-11-10 Kayabacho, Nihonbashi Chuo-ku Tokyo 103-0025|
|URL:||http://www.ctrip.com/ (Chinese), http://jp.ctrip.com/ (Japanese)|
- Provision of IBSC temporary office
- Support with procedures for incorporation