Ctrip Opens Up a $500 Million Marketing War Chest

Chinese online travel service Ctrip (NASDAQ:CTRP) is setting aside a $500 million war chest for marketing and bargain promotions, anticipating – or perhaps stirring up – a travel e-commerce price war this summer. According to Chinese media, the market segment leader is starting its blitz this month, and is investing 10-times more than in previous years for the usual round of marketing mayhem.

Ctrip’s vice president of marketing, Tang Lan, told Netease Tech that the result of this biggest-ever price war will be seen in six months to a year’s time, and will cause the barriers of entry into the online travel segment to be raised.

eLong (NASDAQ:LONG) is Ctrip’s closest competitor. They’re both being hunted down by Baidu-backed Qunar, MangoCity, and 17u.cn. On top of all those rivals are a new breed of mobile app-oriented startups such as Hotel Finder and VeryZhun. Indeed, we reported a rumor last month that Ctrip was looking to acquire the makers of VeryZhun – but that hasn’t yet materialised.

All that is eroding Ctrip’s once dominant market share, which fell by 10.5 percent last year to stand at 41 percent at the end of 2011.

[Source: Netease Tech – article in Chinese]