When the growth rate of the wine and travel industry is still solidified, OTA commissions are high, and small and medium-sized businesses are miserable, JD.com and Alibaba’s two major e-commerce giants will “flip the table” at the same time in 2025 618: zero commission for three years, direct supply chain procurement, member ecological diversion, and instant retail collaboration…… This article uses data to dismantle the moat of Ctrip and Meituan’s 84% market share, restore the helplessness of hotel groups’ “self-built channels”, and disclose for the first time how JD.com uses the “three-cent five” supply chain theory to directly hit the pain points of the industry.
The wine and tourism track has been nothing new for a long time.
This track that Internet companies first intervened in has hardly changed in the past 20 years. China’s earliest and largest OTA platform was born in 1999, when the overall Internet penetration rate in China was less than 1%, and the well-known search engines, social media, and even e-commerce websites had not yet appeared in China.
The market pattern of OTA platforms has also remained stable. In the past few years, even if new entrants such as Douyin have tried to leverage the wine and tourism market with traffic, they have not broken the inherent pattern. To some extent, the degree of solidification of the wine and tourism market is even higher than that of the e-commerce industry, showing a stronger Matthew effect.
The changes occurred during the 618 of this year. JD.com and Alibaba’s two major e-commerce platforms have strengthened their wine and tourism layout almost at the same time. On the same day of 618, JD.com officially announced its entry into the wine and tourism track, launching a three-year 0 commission activity for hotel merchants. On the first working day after the end of 618, Alibaba announced that it would merge Ele.me and Fliggy into the China E-commerce Business Group to strengthen the synergy between the main station’s e-commerce and wine and tourism business.
The market generally believes that the logic behind the two major e-commerce platforms increasing their wine and tourism business at the same time is trying to open up the local life + wine tourism market through a huge number of e-commerce users. At the same time, JD.com also shouted the slogan of empowering the supply chain, trying to reshape the gameplay of wine and tourism from the perspective of the supply chain.
Since the beginning of this year, JD.com and Alibaba have ignited the instant retail market with new gameplay, and the popularity of the market has even attracted Pinduoduo to enter the game. But after all, wine tourism is different from the instant retail market – it has been developing for a longer time and the industry has become more solidified. This is not a new opportunity, it can even be called an old track.
Can e-commerce platforms reproduce the transformation of instant retail in the wine and tourism track? What new changes can they bring to the solidified online travel market? Can the supply chain slogan shouted by JD.com change the inherent stubborn disease between wine and tourism merchants and platforms?
Growing market, solidified pattern
Even though the wine travel industry has been developing for more than 20 years, it is still one of the few tracks in the Internet industry that is still in rapid growth. It can even be said that with the continuous improvement of the national economic level, the market imagination of the wine and tourism industry is still amplifying.
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Just look at the earnings reports of OTA platforms over the past few years. In the first year after the recovery from the epidemic, Ctrip’s revenue growth rate in 2023 was as high as 122%, and the slightly smaller Tongcheng Travel also achieved a revenue growth rate of more than 80%. Even in 2024, when it has entered a period of steady recovery, Ctrip still maintains a revenue growth of nearly 20%, and Tongcheng is as high as 45.8%.
In contrast, the growth of many Internet tracks, including e-commerce, social networking, games, etc., has gradually peaked in recent years, and the revenue growth rate of several Internet giant companies has remained at single-digit levels all year round, and some companies have even shown negative growth. In the first half of this year, Ctrip ranked 7th in the market capitalization ranking of Chinese Internet companies, surpassing Kuaishou, Baidu, Shell and other Internet companies in market capitalization.
“The market for wine tourism is big enough.” Zhang Yi, CEO and chief analyst of iiMedia Consulting, told The Mountain. Zhang Yi has long observed China’s online travel market, and he believes that the prosperity of the tourism market is inseparable from the improvement of the national economic level. “After the per capita GDP of Chinese exceeded the $10,000 mark around 2019, it brought about a particularly big change, that is, everyone’s demand for spiritual culture and health is increasing.”
According to data released by the Ministry of Culture and Tourism, in the four years from 2016 to 2019, the comprehensive contribution rate of China’s tourism industry to GDP remained at a high level of more than 11% all year round. From 2023 to 2024 after the epidemic, the domestic tourism industry recovered rapidly, and the number of domestic tourists in China last year was close to the level of the same period in 2019, and the per capita consumption of domestic tourism reached a record high.
Domestic tourism development from 2014 to 2024/Source “2024 Statistical Bulletin on Culture and Tourism Development”
In the first quarter of this year, the total travel expenditure of domestic residents still maintained a double-digit growth of more than 18% year-on-year. The World Travel and Tourism Council predicts that Chinese tourists are expected to spend nearly $1 trillion on domestic travel this year, which is expected to hit a record high.
However, correspondingly, the pattern of China’s online travel market is relatively solidified, and the oligopoly in the industry is prominent. According to GMV data, the combined market share of three platforms, including Ctrip, Tongcheng, and Meituan, reached 84% in the OTA field. Among them, Ctrip and Tongcheng are still strategic alliances.
Soochow Securities Research Report pointed out that OTA platforms are deeply involved in various economic activities in the mainland tourism market except shopping, accounting for about 70%, and the competitive structure has gradually evolved to an oligopoly. Compared with foreign giants, China’s OTA leaders show the characteristics of “one-stop service” of full-scenario and full-category aggregation, covering a variety of services including hotels, air tickets, train tickets, travel and even car rental, and have a higher voice.
In the past few years, including Fliggy, Douyin, etc., have also tried to open up the wine and tourism market, but with little success. According to BOCOM International, the combined market share of players such as Fliggy and Douyin is only about 11%, which has not shaken the existing pattern of the industry. JD.com also made small-scale explorations in the wine and tourism market in its early years, launching air ticket booking in 2011 and establishing JD Travel Channel in 2014, but these explorations are more to supplement the platform ecology and have not yet formed a climate.
Behind several major OTA platforms are the support of Internet giants, Ctrip (Ctrip + Qunar + Tongcheng) relies on Baidu and Tencent to divert traffic, and Meituan relies on its own high-frequency takeaway traffic diversion. “Since the traffic pattern of high-frequency applications of mobile Internet has been basically stable, the competition pattern of OTA platforms is also relatively stable.” Soochow Securities said.
Soochow Securities Research Report
However, during this year’s 618, JD.com and Alibaba have increased their wine and tourism tracks differently than before. On the one hand, after a retaliatory recovery in 2023, the wine and tourism market has gradually entered a period of steady growth, and tourists’ consumption demand and consumption concepts are facing structural adjustments, showing stronger cost-effectiveness and personalized characteristics, which is an excellent entry window period for new players.
On the other hand, the lightning raid launched by e-commerce platforms in the field of instant retail in the first half of the year has proved the synergistic advantages of the e-commerce ecology and local life businesses including takeaway and wine tourism, and the user mentality of JD.com and Alibaba in the field of takeaway is also expected to continue to the wine and tourism track.
Tensions between merchants and platforms
Similar to e-commerce, food delivery and other industries, the conflict between hotel merchants and OTA platforms has also become increasingly apparent in the past few years. OTA platforms hold traffic entrances and bargaining power, and the balance between merchants and platforms is constantly broken, and small and medium-sized merchants are suffering.
“How do you say that, the world has been suffering for a long time.” A homestay merchant in Guangdong told “On the Mountain”. He owns a number of homestays in several different provinces and is very welcome to e-commerce platforms such as JD.com to enter the wine tourism market.
He has settled in JD Wine Hotel. In his opinion, even if there is no zero-commission policy, he will still operate on JD.com. Although the new platform is still in its infancy and cannot shake the existing platform in the short term, “at least it can be separated a little”, which can give merchants more confidence in facing the platform. “I have high expectations for them, and I hope they can change the entire industry and achieve a fair and just market environment.”
“For merchants, the checks and balances of multiple platforms help make the market less voluminous, which is generally good.” A franchisee of Jinjiang Hotel in Jiangxi told “On the Mountain”. It’s just that his hotel has signed exclusive agreements with other platforms, and it is temporarily unable to launch new platforms such as JD.com.
In the past year, the price war between OTA platforms has intensified, and even copied the automatic price adjustment function of the e-commerce industry, and the platform will capture the automatic price adjustment of hotel prices across the network, causing dissatisfaction among merchants. A report by Xinhua Finance in June pointed out that automatic forced price adjustment by platforms has become a common phenomenon in the industry, but merchants often have to swallow their anger when they are trapped in traffic.
“Now all platforms are very voluminous.” A single hotel merchant in Chongqing told “On the Mountain”. He introduced that some platforms will impose various discounts or price reduction activities for merchants without their consent or knowledge, which makes hotel merchants miserable. In his view, the relationship between the platform and the merchant is mutually beneficial, and the platform can take commissions, but it must also give certain support to the merchants.
Small and medium-sized businesses are subject to factors such as scale and traffic and cannot escape the platform, and some large hotel chain groups have begun to “vote with their feet”. In the past few years, hotel chain groups such as Huazhu, Jinjiang, BTG, and Atour have begun to build their own channels in an attempt to get rid of platform control.
For example, Jinjiang Hotel has obtained the CRS platform WeHotel and the global procurement sharing platform GPP through joint ventures and acquisitions, aiming to create autonomy in the entire industry chain from procurement to marketing to maximize profits. As early as 2012, Huazhu began digital and intelligent construction, setting up its own CRS platform and H Reward membership system.
Hotel groups’ dissatisfaction with OTA platforms may be understandable. Compared with most hotel groups, leading OTA platforms tend to maintain better profit levels. For example, Ctrip’s revenue last year was 43.3 billion yuan, net profit reached 17.2 billion yuan, and net profit margin exceeded 30%. Before changing the caliber of the financial report, the profit margin of Meituan’s in-store hotel business has also remained at a high level of nearly 40%, contributing far more profits than catering takeaway.
Domestic hotel chains have maintained profit margins of around 10% for a long time. For example, Jinjiang Hotel had revenue of 14.063 billion yuan last year, but its net profit was only 1.144 billion yuan, with a net profit margin of 8.1%. Last year, Huazhu’s revenue was 23.09 billion yuan, net profit was 3.048 billion yuan, and the net profit margin was about 12.6%.
Even so, hotel chains still can’t get rid of their dependence on OTA platforms. After years of development, almost all of the major OTA platforms in the industry rely on strong traffic entrances and ecological advantages. Soochow Securities pointed out that the OTA platform has a better traffic pattern and will occupy the bargaining power advantage of the accommodation booking sector for a long time. Especially in the current situation where the overall chain rate of the industry is only 41% and the hotel brand CR3 (the top three concentrations in the industry) is only 15.7%, the weak traffic of hotel groups will still exist significantly.
Soochow Securities Research Report
Last year, the number of registered members of Huazhu Association was close to 270 million, and the number of room nights contributed by the company’s central booking system reached 66.4% in the fourth quarter of last year.
However, last year, Ji Qi, founder of Huazhu Group, still criticized in an internal letter that stores around the world relied too much on OTA platforms and gave profits to OTA platforms under performance pressure, resulting in up to 50% of orders from OTA platforms in some stores.
New ways to play on e-commerce platforms
Where there are pain points, there are opportunities. JD.com and Alibaba want to replicate their success in the instant retail track in the wine and tourism market.
The logic of this style of play is not complicated, and the core logic of e-commerce players opening the wine and tourism market is similar to that of the food delivery field. On the user side, through the huge volume of e-commerce users to convert into wine and travel users, the traffic is completed in one app. The management of JD.com and Alibaba has previously emphasized their business synergy advantages on different occasions.
On the marketing side, they have transformed their previous external marketing investment into concession measures for merchants, such as the three-year commission-free measure launched by JD.com, which can quickly attract merchants to settle in. Liu Qiangdong, founder of JD.com, has previously said that their takeaway business has 40% cross-selling with retail, “so the money we lose is more cost-effective than buying traffic.” ”
Chen Liteng, a digital life analyst at the E-commerce Research Center of NetEconomics, analyzed that relying on the precipitation of JD.com’s retail business and the breakthrough of the takeaway business, JD.com’s wine and tourism sector can obtain a natural diversion entrance. According to this year’s Q1 data, JD.com’s daily takeaway orders reached 25 million, and the high-net-worth users in the PLUS membership system highly overlapped with the travel needs of enterprises.
Zhang Yi, CEO of iiMedia Consulting, also said that JD.com has hundreds of millions of high-end consumer groups, which naturally coincide with the wine and tourism track. Previously, JD.com’s Plus membership system could also cooperate with many sectors such as retail, wine and tourism, takeaway, etc., which could form a closed loop of consumption and enhance the viscosity and activity of JD.com’s overall users. “If JD.com can build a scenario-based linkage and integrate retail, takeaway and wine and tourism scenarios, JD.com can theoretically establish a one-stop life service platform.”
JD.com’s ecological service system built around Plus members
Hotel groups should also value JD.com’s huge high-net-worth user advantages at the earliest. According to previous media reports, the JD PLUS membership system has reached cooperation with 20 hotel groups such as Huazhu, Wanda, and BTG Homeinn. Several small and medium-sized hotel merchants interviewed by “The Mountain” also said that they value JD.com’s brand appeal and high consumer groups more, hoping to bring more incremental customers.
Alibaba’s latest move is to combine the wine and tourism business with instant retail and e-commerce ecology after Fliggy’s poor exploration. After Fliggy merged into Alibaba’s China e-commerce business group, the Taobao flash sale page has launched a hotel reservation portal.
But compared with Alibaba, JD.com’s greater advantage lies in the integration of the supply chain. Liu Qiangdong previously explained at the media communication meeting that all of JD.com’s business revolves around the supply chain. He used the “three cents and five” theory put forward by JD.com when it entered the home appliance industry as an example, emphasizing that JD.com has always shared the dividends of industry development with partners and employees.
JD.com’s “three cents five” theory refers to the fact that if JD.com has the opportunity to earn a profit of one yuan, it will only take seven cents, and the other three cents will be left to partners. Of the seven cents of the profits taken by JD.com, 3 cents and five cents were left for the team, and only three cents and five cents were left for the company’s sustainable development. “Brands take much higher risks and do more than our retailers.”
This is a different business model from existing OTA platforms. In other words, JD.com is trying to break the commission model of traditional OTA platforms and use the supply chain to empower the wine travel industry.
The wine and tourism supply chain is scattered and complex, involving multiple categories such as logistics and warehousing, engineering construction, electrical equipment, linen supplies, etc., and the industry has long been opaque and low-scale. In the past, OTA platforms often selectively ignored this part of the market, preferring commissions as a source of income.
Even if some hotel chain groups have built their own supply chain channels, they are still slightly insufficient due to the level of industrialization, logistics infrastructure and even the gap in management level. For example, the recent “pillow incident” exposed by Atour Hotel reflects the lack of supply chain management of hotel groups to a certain extent.
Zhang Yi, CEO of iiMedia Consulting, believes that JD.com’s prospects in the wine and tourism supply chain can be divided into two aspects. For existing hotel chain groups, JD.com’s entry is difficult. And more single hotels may be more welcoming to JD.com due to their smaller size. The above-mentioned Chongqing hotel merchant said that his current procurement channels are relatively scattered, and if JD.com has a layout in the wine and tourism supply chain, he is willing to try more. “Their overall layout is still very strategic.”
According to the analysis of NetEconomics, JD.com’s core advantage lies in its mature supply chain management system. Chen Liteng of NetEconomics analyzed and speculated that JD.com may be able to replicate its industrial product supply chain experience to the wine and tourism industry and reduce hotel operating costs through the direct procurement model. In energy management, intelligent pricing and other links, its big data analysis capabilities can also provide dynamic inventory optimization solutions for small and medium-sized hotels, forming a “B2B2C” empowerment ecology.
But this is destined to be a more difficult path than the existing OTA model, requiring more patience and time. Fortunately, JD.com has never lacked the determination to cultivate deeply.
