Ctrip increases stake in India travel site MakeMyTrip in Naspers deal

Chinese online travel company Ctrip is doubling its bet on the Indian travel market by increasing its share in the online travel site MakeMyTrip through an exchange with technology investor Naspers, according to a statement from the company released Friday.

Ctrip already held a stake in the Gurugram-based company through a $180 million investment in 2016. The company increased its ownership by entering a share swap deal with Naspers, the South African tech and internet conglomerate, which will exchange its stake in MakeMyTrip for newly issued shares in Ctrip. Following the transaction, Naspers will own approximately 5.6% of Ctrip’s outstanding ordinary shares and Ctrip will hold 49% voting power in the Nasdaq-listed company, which has a market cap of $2.69 billion.

“Through this investment, we can gain more exposure to the fast-growing India travel market and benefit from the growth of the company,” Michelle Qi, Ctrip’s senior investor relations director, told TechNode. Ctrip’s insights on consumer purchasing behavior in China will help MakeMyTrip to offer better product and services for Indian travelers, she added.

The investment comes as the Chinese travel giant speeds up its global expansion in seek of new growth as competition intensifies from domestic rivals like Meituan and Alibaba’s Fliggy.

Since embarking on a globalization strategy over the past few years, Ctrip has inked several overseas deals within its core business, including a $1.74 billion acquisition of Skyscanner and purchase of Trip.com, and in other industries related to travel, like the investment in jet startup Boom Supersonic. It also plans to boost expansion in the European market. After the past five years, revenue from international businesses now represents around half of the company’s total revenue, according to Chinese media reports citing Ctrip CEO Jane Sun.

Investment in MakeMyTrip shows a deepened commitment to the expansion drive, in India as well as the broader Southeast Asia market. Compared with its neighbors, India is a latecomer to China’s outbound tourism boom.

To address that, the Indian government is committed to increasing Chinese visitors by 6,000% by 2023. The combination of the growing tourism market and government support could open an opportunity for online travel companies to tap into India, a significant market based on its size alone. Notably, Ctrip was reportedly planning to invest $100 million in Indian online food delivery and restaurant search platform Zamato in September.

In addition, the deal brings Nasper, an early Tencent investor, to Ctrip’s shareholder roster. “Naspers is one of the most well-known global internet and entertainment group and one of the largest technology investors in the world. We are glad to have Naspers as one of our top shareholders. We look forward to work closely with Naspers to build a mutually supportive relationship in the future,” Qi said.