Ctrip Invests $200 million in LY.com, Becoming Its Second Largest Shareholder

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China’s leading online travel service Ctrip announced today it has invested more than USD200 million in cash in LY.com, one of its competitors, becoming the second largest shareholder in the latter. It’s undisclosed what a percentage Ctrip has taken in LY, but rumor says it’s about 30%.

LY.com, formerly 17u.cn, wasn’t well-known in China’s online travel market until recently as it introduced funding from Chinese Internet giant Tencent and would run the flight booking service on Tencent’s flagship mobile app WeChat.

Commenting on the investment, Liang Jianzhang, CEO of Ctrip, points out the LY is a leading player in China’s sightseeing ticket market where has become the battlefield for Chinese online travel services and Ctrip planned to invest heavily in.

Dramatic changes are brewing in China’s online travel market. One week ago LY also announced partnership with eLong, Ctrip’s direct competitor, on hotel inventory and sightseeing tickets. A rumor went so far that Ctrip was in talks with Qunar, the travel search service under Baidu, on potential acquisition.