On the afternoon of January 19th, Ctrip Group held its annual meeting – “Joining Hands For Success” – in Shanghai. At the meeting, Ctrip’s co-founder and Executive Board Chairman James Liang unveiled Ctrip’s vision for the future: to become the leading, the strongest and best company in the global travel industry. As an economist and entrepreneur, James Liang first analyzed the prospects of China’s economy and tourism industry from a macro perspective.
“I’m very optimistic about the long-term prospects of the Chinese economy, especially China’s tourism industry. This year’s data shows that despite the downward pressure on the overall economy, the tourism industry is still very healthy, outpacing the overall economic growth rate. This trend will continue and become more pronounced in the future.” He added that tourism will play a very important role in the transformation of China’s economy from one based on production and manufacturing to one based on services and consumption.
“I am very proud to tell you that in the past quarter our global GMV that is, gross merchandise volume, has become the highest in the industry. So you can be proud to tell your friends that Ctrip is the biggest company in the best industry.”
Mr. Liang declared that Ctrip, as the leading company in China’s tourism industry, must not only be the leading company, but also lead the industry in innovation. “In the past year, we have made many efforts in innovation, such as high-speed rail tours, package services, and opened thousands of online and offline stores.” Liang also noted that Ctrip managed to make strides in its core competitiveness in 2018. “In the future, we must continue to work hard to create the best technology, the best services, and the best products.”
He also pointed out that as a leading enterprise in the industry, Ctrip must shoulder more responsibilities for customers, partners and society. “We must focus on value creation for our customers; empowering our partners to create value for the industry; and creating more value for society.”
In the past year, Liang said, Ctrip has deepened its platform strategy, aiming to enable participants in every industry to benefit from Ctrip’s extensive ecosystem. At the same time, Ctrip has continued its commitment to advancing public welfare, such as the education of children from poverty-stricken mountainous areas and assisting migrant worker families to reunite in cities. “We will spare no effort to promote the progress of the industry and carry out social responsibility activities in the future.”
“It is not enough for Ctrip to be the biggest company in the best industry, we also must be the strongest and the best company,” Liang concluded.
The full text of James Liang’s speech
James Liang: First of all, I would like to express my special thanks and best wishes to all of you, our employees and their family members, for your efforts and endeavors, for the hard work of our partners, and for your outstanding achievements in the past year. Thank you.
I should begin with the macro situation. Everyone is feeling a certain amount of anxiety recently. As an entrepreneur and an economist, I am personally very optimistic about the long-term prospects of the Chinese economy. I will spend some time talking about why. There are many volatile factors, but they are short-term ones. If we take a look at China’s current level of technology, measured by several indicators like the level of human resources, the investment in research and development, and high-tech products, we can see that China is moving closer to developed countries in terms of per capita scientific and technological development. These indicators show that China is actually already close to some less competitive developed countries, such as Italy and Spain. The per capita income in China, however, is only one-half, one-third or even one-quarter of theirs, so we can say China has great potential for the future.
The question is why is per-capita income only one-half, one-third, one-quarter of these countries? One big reason is that China still has a relatively low urbanization rate. Presently, the urbanization rate of China is only around 50%. In China’s big cities like Shanghai and Beijing, the work efficiency and per capita income are already quite close to those of developed countries, but half of Chinese are still living in rural areas. In the future, 10 to 20 million young people will come from rural areas to the city to work and live each year, meaning there will be great potential in terms of production efficiency and spending power. In the future, the urbanization rate is expected to grow by 1 or 2 percent annually. In other words, in 10 to 20 years, the urbanization rate of China will reach 70% to 80%, which is actually a reasonable level for all middle-income countries.
This huge potential will enable the Chinese economy to continue to be one of the world’s fastest growing economies over the next decade or two.
Of course, some people may point out that I haven’t mentioned the Chinese population structure. Won’t this become a big problem? The answer is yes. China is now facing a rapid decline in its new-born population, and must launch a very strong policy to boost the birth rate. However, the decline in new babies will only affect the economy a generation later; we are very optimistic for the economic development outlook over the coming 10 to 20 years. But in the longer term, say, over 20 years, we have to solve the population problem.
Now, I want to share you my view on the macros situation in the tourism industry. As everybody knows, the tourism industry is the best industry. A few points may assist you explain to your friends and your family members why the industry is the best. As I have said many times, the tourism industry is the only one that has the heavy assets to address the emotional needs of consumers. Why is it so important? If it has heavy assets, it will always enjoy a high value. And meeting emotional needs will only grow more important as the country develops. Therefore, the tourism industry’s proportion of the GDP will grow too. This year’s statistics may justify this. Despite downward pressure on the overall economy, the tourism industry is still very healthy, outpacing the overall economic growth rate. This trend will continue and become more pronounced in the future and tourism will play a very important role in the transformation of China’s economy from one based on production and manufacturing to one based on services and consumption.
China’s tourism industry has another big advantage: China’s transportation infrastructure network is the leading, most efficient and least costly in the world. For instance, our high-speed rail is the most extensive, the cheapest, and the fastest high-speed rail network in the world. This makes China one of the easiest places in the world to travel.
In addition, while governmental regulation is still relatively strict in other service industries like finance, medical care or education, the government is very supportive and very open to the development of the tourism industry. We are very fortunate to be able to fully utilize our imagination to make innovations in this sector.
Of course, tourism has the capacity to make great contributions to society, as it can enhance communication between different groups, promote world peace, facilitate innovation, and assist us to explore the meaning of life. So when you go back to your friends and family, you can share my view with them that the tourism industry is indeed the best industry.
Ctrip is truly a leading company in the tourism industry. We must, as an industry leader, not only do well in all aspects of performance, but also use our innovative capabilities to lead the development of the industry. For example, last year we launched high-speed rail tours, package services, and opened thousands of online and offline stores – all very important innovations. And we continue to increase our core competitiveness in terms of service, technology, and products.
We not only have great opportunities in China, but also internationally. Our development in the areas I have just mentioned gives us a good foundation for global expansion. We are catching up with some of our global peers in selected areas. We have achieved an exponential increase in overseas market share. I am very proud to tell you that in the past quarter our global GMV, that is gross merchandise volume, has become the highest in the industry. So you can be proud to tell your friends that Ctrip is the biggest company in the best industry.
Of course, being big is not enough; we want to be the strongest. What is the strongest company? This means having the best technology, the best services, and the best products. We won’t deny that we still have a lot of things to learn from our peers, but we are confident that with our efforts, in the near future, we will become not only the leading company, but also the truly strongest company in our industry.
And as an industry leader, Ctrip has to shoulder more responsibilities. What are these responsibilities? We still need to focus on the customer and create value for our customers around the world. We must empower our partners to create value for the industry. We also need to create more value for society.
In the past year, we have made noteworthyefforts in these areas. For example, we have deepened our platform strategy, aiming to enable participants in every industry to benefit from the Ctrip ecosystem. For instance, whether you are the owner of a homestay, or you want to open a store, or you are a tour guide, you can find a place on our Ctrip platform and get assist with your business development. We have also made many efforts in the area of public welfare. For example, we have made very meaningful attempts to improve the education of disadvantaged groups such as children in poverty-stricken mountainous areas, and for the reunion of migrant worker families by assisting family members come to the city. We will spare no effort to carry out public welfare activities in the future and promote the progress of the industry.
So, we do not only want to be the biggest company in the best industry, but also the strongest and the best company in the best industry. Thank you again.
Ctrip.com International, (NASDAQ: CTRP) was trading -41.65% away from its yearly high level, during the last trading session. The last session’s volume was 3,926,319 compared to its average daily volume of 5.37M shares. The company has its outstanding shares of 531.93M. The Servicesstock showed a change of -2.45% from opening and finally closed at $30.29 by scoring -2.16%.