Qunar, a travel search and service provider, went listed on the NYSE last week. Its shares soared 89% on the first day of trading. As Qunar became more than a search engine when it built a transaction system in 2012, it is believed it will eventually become direct competitors of existing online travel agencies such as Ctrip and eLong. With that concern, in early this year, a handful of online travel services, including Ctrip and eLong decided to stop working with Qunar. But later they resumed cooperation with Qunar. One the reasons is the traffic on the search service is too high to ignore.

Now Qunar’s market cap is a little less than half of that of Ctrip who is still the largest player in online travel in China. When asked about the potential competition with Qunar on the earnings call for Q3 2013, James Liang, chairman and CEO of Ctrip, said it’s more of competition on air ticket but more of partnership on hotel, for Qunar’s hotel inventory mostly depends on third-party suppliers.

But like what it has done on air ticket, Qunar also possibly can build partnership directly with hotels rather than travel agencies or other third parties. Mr. Liang thinks what can eventually differentiate Ctrip from Qunar is the quality of service — it sounds it doesn’t have any technological advantage.

Qunar differentiate itself from any other online travel agencies with more travel service providers on its platform. It’s more like a Taobao-style marketplace while Ctrip and its peers are more like business-to-customer e-commerce platforms like JD (formerly 360buy).

Ctrip reported a 31% year-over-year increase in net revenues and 92% growth in net profit in Q3 2013. The strong growth in profit reflects the effort James Liang has made since he went back to reign upon his throne.

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com

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