The battle between the two: a game of efficiency

What is the most essential meaning of competition among industry leaders? Yes, the best answer may be what Robin Li said, "See how business changes the world." Industry leaders are not just about profits and market share, but more importantly, whether they can promote the efficiency of the entire industry.

At the just concluded PhoCusWright conference, Liang Jianzhang and Zhuang Chenchao's speeches were both remarkable. The following financial report is more like a report card handed in in actual business practice.

On November 25, 2014, Ctrip released its third quarter financial report. Its revenue, hotel room nights, transportation ticket bookings and other important indicators are as follows: revenue of 2.1 billion, a year-on-year increase of 38%; hotel room nights in the first three quarters increased by 67%, 64% and 69% year-on-year respectively; transportation ticket bookings increased by 98% year-on-year.

Liang Jianzhang said that all of the above items exceeded his expectations. For example, Ctrip previously expected revenue to be 30% to 35%.

Later, in a conference call after the earnings report, Ctrip warned that it would suffer a quarterly loss for the first time in Q4 this year. In Q3 2014, Ctrip's operating profit margin dropped sharply from 19% in the same period last year to 4% this year. It is only one step away from a loss.

At the same time, Ctrip's net operating income in Q4 has an annual growth rate of about 30%. Compared with the 38% growth rate in the latest financial report, Ctrip has undoubtedly lowered its growth expectations.

At this time, its old rival Qunar.com has not yet released its latest financial report. However, judging from its various business indicators, its unstoppable growth rate is a foregone conclusion.

The revenue growth rate is not an absolute value to measure the quality of a company, but the story behind it reveals the essence of the company.

All companies that can be called industry leaders represent the most advanced productivity and prioritize efficiency. In contrast, Ctrip, with nearly 30,000 employees, is almost the same size as Baidu. However, its output is only about 15% of Baidu's (compared with its total revenue in the same quarter).

It is true that the search market and online travel are at different stages of development, but the numbers can best reveal the low efficiency of Ctrip. If such efficiency is still used to represent the industry indicators of online travel, there will inevitably be disruptors who will rise up.

Qunar.com and Ctrip go left and right respectively

In fact, Ctrip's huge call center has been criticized by investors. However, this historical burden cannot be removed for the time being.

Faced with no hope for business growth, Ctrip adopted short-sighted behavior such as “investing everywhere” and purchasing heavy assets such as cruise ships.

One investor pointed out: "Only those who have no confidence in their own company will buy heavy assets everywhere. If the company has a bright future, why not invest in your own company?"

Observers found that Qunar.com continued to implement the strategy of "seizing market share".

At the same time, its efficiency is far ahead of the industry. First of all, Qunar.com has a huge amount of big data, and all it completes are cloud questions and answers. At present, Qunar.com is working on fully automating its services. Zhuang Chenchao hopes that by 2015, most of these services can be completed by machines.

From this perspective, it is no longer necessary to say which one is more efficient, Qunar or Ctrip. In fact, within a year, Qunar’s speed in direct hotel bookings surpassed that of Ctrip and eLong by several times in more than a decade.

When Baidu invested in Qunar, what must it have seen? Because Robin Li only needed to invest an additional 2 billion to acquire Ctrip. For a company willing to spend $1.9 billion to acquire 91, whether to invest or not is not a matter of "money", but whether the investor has "prospects"?

Between Qunar and Ctrip, which one is more likely to set new industry standards, lead industry efficiency, and thus promote an overall virtuous cycle? The answer is obvious.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.