The online travel agency (OTA) landscape in China used to be complicated with players like Ctrip, Elong, Tongcheng, Tuniu, and Qunar names that often came up in discussions about China’s burgeoning travel trade. A few mergers, “strategic investments,” partnerships, and outright acquisitions later, Ctrip emerged as the dominant platform not only for domestic bookings, but for international bookings and travel products as well. Things were simple for a while, but now, things may be taking a turn for the complex again. At the center of all this: Tencent and Booking Holdings-backed Meituan-Dianping and yet another rumored IPO.

The rise of Meituan-Dianping could very easily shake up a seemingly monolithic Chinese OTA field

Meituan-Dianping with its still-young travel brand Meituan Travel is one of many “new” names that tourism professionals may want to make note of. Previously believed to be eyeing a $3 billion U.S. IPO this year, Bloomberg now reports that the company may be filing for a $6 billion IPO in Hong Kong as soon as this month. The $6 billion would represent around 10 percent of the company, with Meituan-Dianping vying for a $60 billion valuation.

In comparison, Ctrip’s market cap stands at around $27 billion, and Chinese tech giants Alibaba and Tencent are both valued at over half a trillion dollars.

In other words, a $60 billion valuation would make Meituan-Dianping more than twice as valuable as China’s perhaps best-known travel brand (not counting its airlines), but far, far, far off the valuations of China’s best-known tech rivals.

A $60 billion valuation would put Meituan-Dianping at twice the value of Ctrip

But that’s also where things come together. Alibaba and Tencent’s rivalry isn’t going anywhere—or depending on how you put it—it’s going everywhere. One of many industries where Alibaba and Tencent are competing is mobile payments, and their battle to become the dominant payment platform for international Chinese travelers remains a key story in the business of global Chinese travel. More pertinent, however, is how this battle is now becoming a central theme in China’s online travel market.

As things would have it, Meituan-Dianping counts Tencent as a key backer—and travel is now a key focus of what was once a local services-oriented company with similarities to companies like Groupon, GrubHub, and Yelp.

While Meituan-Dianping is increasingly a prominent travel brand, travel is one sector among many that the company is in involved in

Meituan-Dianping, which describes its user base as consisting of “240 million young active buying consumers,” makes for a particularly formidable opponent to Alibaba’s very own youth-oriented OTA, Fliggy. In Meituan-Dianping, Tencent has a company that could prove a serious challenge to Alibaba’s Fliggy, which previously went by Taobao Travel and later Alitrip before its “millennial makeover.”

Meituan Travel at ITB China 2018. Photo: Mason Hinsdale / Jing Travel

And Meituan Travel could prove a challenge to Ctrip as well. Young travelers are key to the company’s future, and a Meituan Travel (or Fliggy) that does a much better job at catering to this market segment would leave Ctrip investors justifiably worried. There’s no question that Meituan-Dianping is serious about travel: the only Chinese OTA with a comparable presence at ITB China was Ctrip.

A Tencent-backed, over $60 billion-worth Meituan-Dianping with big ambitions in travel may just be enough to shake up China’s OTA industry again. Besides, Tencent may very well find itself wanting to put more up against Alibaba’s Fliggy than just a slice of Meituan Travel.

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