David Thomas is an expert on doing business in China. With a successful history of forging global business relationships, David helps leaders,
entrepreneurs and investors solve the China puzzle. As part of that, he’s launched a daily email newsletter ‘China Bites’ which you can read here on Targeting China.

Continuing the theme of travel and tourism, I often get asked to talk about how western investors can access the China middle class growth story, and a good example of a company to watch is Ctrip, which listed on the
Nasdaq in 2003 and is one of the few Chinese travel companies available
to investors via overseas markets. Investing directly into China A shares
requires a set of skills, contacts and knowledge which is beyond the
capabilities of most western investors, and so with a current valuation
$20 billion, and a growth rate of over 20% per annum, Ctrip is one to
watch for the future.

I enjoyed reading an interview by McKinsey with Ctrip’s CEO, Jane Sun,
which provided some interesting insights into China’s travel industry and the dreams and aspirations of Chinese tourists. Ctrip have acquired travel-related businesses around the world, notably Skyscanner (UK), MakeMyTrip (India) and a number of Chinese tour operators in the USA, and have a strong ambition to become a dominant IT platform engaging with 300 million customers every day. Their “ABCD Strategy” (Artificial
Intelligence, Big Data, Cloud Computing and Data Mining) sounds
particularly intriguing, and like all technology players in China, their
R&D spending is likely to position them as a global market leader in no
time at all.

A recent scan of the views and comments of respected investment analysts around the world suggests that Ctrip is possibly over-valued in price at the moment, compared to some of its western competition, which may scare off investors in the short term. But I wouldn’t be writing them off just yet, particularly if you spend a few minutes listening to Jane Sun.

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