More fallout from Marriott’s email gaffe: Marriott temporarily delisted by major Chinese travel site

After Marriott engendered a national controversy in China in January, its digital strategy was forced to change. We’ve already covered how the incident led to Marriott’s Chinese-language website being shut down for two months, and how the site returned without a direct-booking feature.

One effect of the incident, unreported by Western media, was that Marriott hotels were temporarily delisted in January by Meituan-Dianping, a major Chinese travel site. Our independent verification, done on May 24th, 2018, indicates that Marriott properties are now searchable on Meituan.com and Dianping.com.[1] [2]

Meituan-Dianping is part of an emerging alliance of Chinese travel sites that captured 94% of the online market – a superior position to Marriott’s partner, Fliggy, which held less than 2.5%.

Marriott Delisted by Meituan-Dianping

On January 12th, 2018, Thepaper.cn reported that following the January incident, not only were Marriott hotels boycotted by customers and convention organizers, Marriott-branded properties were also delisted from booking sites operated by Meituan-Dianping.[3] Journalists for Thepaper.cn searched the sites for 万豪 (Marriott) and several Marriott brands such as 万怡 (Courtyard by Marriott) or 万丽(Renaissance) but came back with no results on January 12th.[4] The delisting of Marriott properties on Meituan.com and the Meituan app was reported by Xinhua News on the same day.[5]

We discussed Meituan-Dianping in a previous post. Since its 2015 launch from the merger of other sites, Meituan-Dianping has become a major player in the Chinese online lodging booking industry, occupying more than 16% of the market in 2016. For comparison, Fliggy, Marriott’s OTA partner, occupied less than 2.5%.[6]

Marriott’s delisting, however temporary, deprived the company of access to a substantial portion of the online travel market.

2016 Chinese Online Lodging Market Share (by Trade Volume). Source: iResearch

Putting it in context: online travel consolidation could put pressure on Marriott

We explored in a previous post how OTA companies backed by Baidu and Tencent have begun to form an alliance that captures more than 94% of the total trade volume of online lodging bookings in China.[7] Meituan-Dianping is part of the alliance: it is both backed by the Priceline group, partner of Ctrip since 2012, and Tencent. Marriott’s OTA partner, Fliggy, is on the outside of this alliance.

Marriott already saw its relationship with its former partner, the major OTA site Ctrip, unravel; the latter downranked all of Marriott properties on its websites in 2017. The conflict seems to have had long term impact. In early April 2018, nearly one year after Ctrip first downranked Marriott hotels, a search for hotels in Shanghai on Ctrip returned no Marriott hotels on the first page.[8] Marriott hotels were similarly absent from the Shanghai hotel listing of the Ctrip affiliated travel websites Qunar and eLong.[9] [10]

Marriott is at a disadvantage against an alliance that maintains a superior market position.

 

[1] Meituan, retrieved May 24th, 2018, http://bj.meituan.com

[2] Dianping, retrieved May 24th, 2018, https://www.dianping.com

[3] Sina (2018, January 12th), 知名企业退订万豪更换年会地点,大众点评、美团等集体屏蔽, retrieved May 8th, 2018, http://news.sina.com.cn/o/2018-01-12/doc-ifyqptqv8449294.shtml

[4] Sina (2018, January 12th), 知名企业退订万豪更换年会地点,大众点评、美团等集体屏蔽, retrieved May 8th, 2018, http://news.sina.com.cn/o/2018-01-12/doc-ifyqptqv8449294.shtml

[5] Xinhua News (2018, January 12th), 国内在线旅游运营商开始下架万豪酒店产品, retrieved May 30th, 2018, http://www.xinhuanet.com/travel/2018-01/12/c_1122250663.htm

[6] iResearch, 2017年中国在线旅游度假行业研究报告, p. 20, retrieved April 25th, 2018, http://report.iresearch.cn/report_pdf.aspx?id=3025

[7] iResearch, 2017年中国在线旅游度假行业研究报告, p. 20, retrieved April 25th, 2018, http://report.iresearch.cn/report_pdf.aspx?id=3025

[8] Ctrip, retrieved April 2nd, 2018, http://www.ctrip.com/

[9] Qunar, retrieved April 2nd, 2018, https://www.qunar.com/

[10] eLong, retrieved April 2nd, 2018, http://www.elong.com/

随着中国对领土主权立场更加强硬,万豪是否仍有回旋余地?

1月,万豪在发给中国会员的邮件中,暗示台湾,香港和澳门是与中国独立分开的国家,在中国互联网信息办公室暂时关闭万豪网站及其移动应用程序之后,万豪随后立即发表了措辞谦卑的歉文。

4月,中国民航管理总局指示36家国际航空公司更正其网站,以反映中国对台湾主权的立场,并准确显示香港和澳门归属中国领土。[1]

万豪毫无保留的道歉会使企业丢失对于国际运营的美企而言在未确凿的领域的灵活性吗?

多样标注仍然存在

万豪首席执行官阿恩·索伦森(Arne Sorenson)对电子邮件失误发表的谦文中,他列举了万豪为纠正所犯错误已采取的举措。 其中包括,“我们审查了可能存在相同误导性的网站和应用程序,以确保标注准确无误”。[2]

然而,万豪北美(美国和加拿大)网站上的酒店目录仍然把中国与澳门和台湾分开列出。[3]

万豪酒店目录亚洲板块将中国,澳门和台湾列为独立国家。[4]

阿恩·索伦森本人针对不同听众发表过对中国领土主权不一致的观点。在回应分析师关于2018年第一季度收益报告中,索伦森列出了中国出境旅游的最大市场,其中包括澳门和香港。 该名单还包括印度尼西亚,泰国和澳大利亚,列单混淆带略这些中国地区与其他国家之间的区别。[5]

中国加强执法

一些国际企业勉强执行中国政府对领土划定的新规。今年5月,《华尔街日报》报道,中国民用航空局发函表示,仍有一些航空公司违反中国有关正确标识各地区的法律,并表示除非他们立即遵守规定,否则将承担处罚责任。[6]

中国外交部一直呼吁在华经营的外国企业尊重中国国家的主权和领土完整,“无论美国说什么都不能改变世界上只有一个中国的立场,香港,澳门和台湾是中国不可分割的领土”。中国外交部发言人耿爽说。[7]

据《商业内幕》称,几家主要航空公司已在其网站上更改了对台湾的标注。 5月,《商业内幕》最先发现马来西亚航空公司在其预订表格中不再将台湾标注为国家。 《环球邮报》的一名记者也发现了加拿大航空公司在台湾命名方面的转变:所有过往把台湾列为国家的出处都被中国的缩写“CN”所取代。 汉莎航空公司和英国航空公司在网站上不再将台湾与中国分开。[8]

白宫在一份声明中尖锐地批评中国:“唐纳德·特朗普总统反对美国的政治正确性。 他将支持美国人抵制中国共产党将中国政治正确性强加给美国企业和公民。”[9]

如果中国将针对航空公司的管理政策施用于像万豪这样的美国酒店企业,那么这将意味着万豪在其美国网站上的相关国家标注也将发生变化。

 

[1] Trefor Moss, “China’s Plane ‘Nonsense’ or Sovereign Right? The Airline Map Flap,” Wall Street Journal, 5/7/18. https://www.wsj.com/articles/chinas-plane-nonsense-or-sovereign-right-the-airline-map-flap-1525696597.

[2] “Statement from Arne Sorenson, President and CEO, Marriott International, Inc.,” Marriott News Center (press release), 1/11/18. http://news.marriott.com/2018/01/statement-from-arne-sorenson-president-and-ceo-marriott-international-inc/.

[3] Hotel Directory, Marriott.com, retrieved 5/30/18. https://www.marriott.com/hotel-search.mi.

[4] Hotel Directory, Marriott.com, retrieved 5/15/18. https://www.marriott.com/hotel-search.mi.

[5] Marriott International First Quarter 2018 Earnings Conference Call Transcript, 5/9/18, p. 16. https://marriott.gcs-web.com/static-files/0eae8e59-7bad-4991-881d-b2778424c00f.

[6] Trefor Moss, “China’s Plane ‘Nonsense’ or Sovereign Right? The Airline Map Flap,” Wall Street Journal, 5/7/18. https://www.wsj.com/articles/chinas-plane-nonsense-or-sovereign-right-the-airline-map-flap-1525696597.

[7] Vicky Xiuzhong Xu, “China hits back after White House slams territory warning to global airlines as ‘Orwellian nonsense’,” ABC (Australian Broadcasting Corporation), 5/7/18. http://www.abc.net.au/news/2018-05-07/china-retaliates-after-white-house-slams-its-warning-to-airlines/9734026.

[8] Tara Francis Chan, “Four major airlines quietly changed their references to Taiwan — and it shows just how much power China has over foreign companies,” Business Insider South Africa, 5/16/18. https://www.businessinsider.co.za/air-canada-malaysia-airlines-references-to-taiwan-2018-5. The references to Taiwan are not consistent on the British Airways and Malaysia Airlines websites. On British Airways’ route network directory, the company includes Taiwan as a separate country (see Route Network Country List, British Airways, retrieved 6/6/18. https://www.britishairways.com/en-us/information/flight-information/our-route-network). Malaysia Airlines has a destination page for Taipei titled “Taipei, ROC” (“Taipei, ROC,” Malaysia Airlines, retrieved 6/6/18. https://www.malaysiaairlines.com/us/en/destinations/asia/flights-to-taiwan/flights-to-taipei.html).

[9] “Statement from the Press Secretary on China’s Political Correctness,” White House, 5/5/18. https://www.whitehouse.gov/briefings-statements/statement-press-secretary-chinas-political-correctness/.

As China steps up enforcement of sovereignty claims, does Marriott have room to maneuver?

In January Marriott communicated with Chinese customers in a manner that suggested that Taiwan, Hong Kong, and Macau were countries separate from China.  Marriott quickly issued an abject apology but not before China’s Cyberspace Administration demanded that Marriott temporarily shut its website and mobile app to Chinese residents.

In April Chinese aviation authorities directed 36 international airlines to amend their websites to reflect China’s sovereignty claims over Taiwan, and to accurately show the status of Hong Kong and Macau as Chinese territories.[1]

Did Marriott’s unreserved apology make it difficult for the company to retain some flexibility in what appears to be unsettled ground for US based companies operating internationally?

Various labeling systems remain

In Marriott CEO Arne Sorenson’s fulsome apology for the email blunder, he listed steps that Marriott had taken to correct the error. This included, “We also reviewed the other areas on our websites and apps where this type of functionality might exist to make sure the labeling is correct.”[2]

However, a look at the hotel directory on Marriott’s North American (US and Canada) website shows that Marriott still lists China separately from Macau and Taiwan.[3]

The Asia section of Marriott’s hotel directory lists China, Macau, and Taiwan as separate countries.[4]

Arne Sorenson himself has described Chinese regions differently to different audiences. In the Q1 2018 earnings report call with analysts, Sorenson listed the biggest markets for Chinese outbound travel as including Macau and Hong Kong. The list also included Indonesia, Thailand, and Australia, eliding the distinction between these Chinese regions and other countries.[5]

China steps up enforcement

Some international companies have struggled to fully comply with new Chinese rules related to the labeling of territories.  In May, the Wall Street Journal reported that a letter sent by the Civil Aviation Administration of China said some airlines were still guilty of violating the laws of China related to correct labeling of various territories and said they would be liable for punishment unless they swiftly comply.[6]

The Chinese Foreign Ministry has called for foreign companies operating in China to respect the country’s sovereignty and territorial integrity: “Whatever the US said cannot change the fact that there is only one China in the world and Hong Kong, Macau and Taiwan are indispensable parts of Chinese territory,” Geng Shuang, the Chinese foreign ministry spokesman said.[7]

Several major airlines have changed their references to Taiwan on their websites, according to Business Insider. Malaysia Airlines no longer refers to Taiwan as a country on its booking form, a change first noticed by Business Insider in May. A Globe and Mail journalist also spotted Air Canada’s shift in its naming of Taiwan: all mention of Taiwan as the country had been replaced by “CN,” the abbreviation of China, with no mention of Taiwan. Lufthansa and British Airways changed their websites to no longer refer to Taiwan separately from China.[8]

The White House sharply criticized China in a statement: “President Donald J. Trump ran against political correctness in the United States. He will stand up for Americans resisting efforts by the Chinese Communist Party to impose Chinese political correctness on American companies and citizens.”[9]

If China applied the airline policy to US-based hotel companies like Marriott, that would imply changes in Marriott’s reporting of countries on its US website.

 

[1] Trefor Moss, “China’s Plane ‘Nonsense’ or Sovereign Right? The Airline Map Flap,” Wall Street Journal, 5/7/18. https://www.wsj.com/articles/chinas-plane-nonsense-or-sovereign-right-the-airline-map-flap-1525696597.

[2] “Statement from Arne Sorenson, President and CEO, Marriott International, Inc.,” Marriott News Center (press release), 1/11/18. http://news.marriott.com/2018/01/statement-from-arne-sorenson-president-and-ceo-marriott-international-inc/.

[3] Hotel Directory, Marriott.com, retrieved 5/30/18. https://www.marriott.com/hotel-search.mi.

[4] Hotel Directory, Marriott.com, retrieved 5/15/18. https://www.marriott.com/hotel-search.mi.

[5] Marriott International First Quarter 2018 Earnings Conference Call Transcript, 5/9/18, p. 16. https://marriott.gcs-web.com/static-files/0eae8e59-7bad-4991-881d-b2778424c00f.

[6] Trefor Moss, “China’s Plane ‘Nonsense’ or Sovereign Right? The Airline Map Flap,” Wall Street Journal, 5/7/18. https://www.wsj.com/articles/chinas-plane-nonsense-or-sovereign-right-the-airline-map-flap-1525696597.

[7] Vicky Xiuzhong Xu, “China hits back after White House slams territory warning to global airlines as ‘Orwellian nonsense’,” ABC (Australian Broadcasting Corporation), 5/7/18. http://www.abc.net.au/news/2018-05-07/china-retaliates-after-white-house-slams-its-warning-to-airlines/9734026.

[8] Tara Francis Chan, “Four major airlines quietly changed their references to Taiwan — and it shows just how much power China has over foreign companies,” Business Insider South Africa, 5/16/18. https://www.businessinsider.co.za/air-canada-malaysia-airlines-references-to-taiwan-2018-5. The references to Taiwan are not consistent on the British Airways and Malaysia Airlines websites. On British Airways’ route network directory, the company includes Taiwan as a separate country (see Route Network Country List, British Airways, retrieved 6/6/18. https://www.britishairways.com/en-us/information/flight-information/our-route-network). Malaysia Airlines has a destination page for Taipei titled “Taipei, ROC” (“Taipei, ROC,” Malaysia Airlines, retrieved 6/6/18. https://www.malaysiaairlines.com/us/en/destinations/asia/flights-to-taiwan/flights-to-taipei.html).

[9] “Statement from the Press Secretary on China’s Political Correctness,” White House, 5/5/18. https://www.whitehouse.gov/briefings-statements/statement-press-secretary-chinas-political-correctness/.

万豪董事会成员米特·罗姆尼(Mitt Romney)多次强硬抨击中国

万豪首席执行官阿恩·索伦森Arne Sorenson在针对1月份电子邮件事件的致歉函中明确表示,“万豪国际尊重并支持中国的主权和领土完整。”考虑到该事件导致万豪与中国之间的紧张关系,索伦森承诺将工作重点放在确保万豪酒店的中国客户感受到尊重。[1]

截至2018年,米特罗姆尼已在万豪董事会任职累计17年,比任何不属于万豪家族的董事会成员任职时间都长。[2] 然而,在竞选总统期间,他屡次对中国进行强硬抨击,支持向台湾军售,并提议在太平洋地区建立美国军队来对抗中国。

在各大企业逐与中国努力保持微妙外交政策的时代,米特罗姆尼会是万豪酒店的理想大使吗?

罗姆尼支持向台湾出售武器,对中国采取激进态度

2011年,奥巴马政府宣布升级台湾军用飞机的计划,遭到中国政府的强烈抗议。[3]

米特罗姆尼谴责政府的这一举动,并表示,“奥巴马总统拒绝向台湾出售新型军用飞机,再次证明奥巴马总统在外交政策上的领导不力。过去三十年来,每一任美国总统,不论是共和党总统或是民主党总统,都肯定了我们在协助台湾防御的立场上所带来的利益。面对中国密集的军事建设,美国需要在亚洲有最强大的合作伙伴关系。[4]”台湾执政党国民党副主席蒋孝严赞许了罗姆尼对台湾军售的立场, 称之为“好消息”。[5]

罗姆尼指控中国盗窃和开展“沉默”的贸易战

在2012年的总统大选期间,罗姆尼声称中国正在进行一场掩人耳目的贸易战:“贸易战进行的悄无声息,而他们正在赢得胜利。”[6]

罗姆尼在回答有关如何制衡中国以避免21世纪冷战的问题时表示,“他们不能侵入我们的计算机系统并从我们的政府和公司中窃取专利,外观设计和知识产权,然后再复制,伪造它们并将它们出售给全世界”。[7]

罗姆尼在竞选总统期间的贸易政策主旨是“对抗中国”。[8]他拟定的‘第一天总统行政命令清单’中的一项包括“制裁中国不公平贸易行为”,指示美国财政部在半年度报告中将中国列为汇率操纵国,如果中国不迅速上调其汇率的话,将指示商务部评估对中国进口产品的反倾销税。” [9]

在2012年竞选期间,罗姆尼在推文中说中国窃取了美国的知识产权。[10]

在2018年参议员竞选期间,罗姆尼在特朗普总统向中国提出征收1000亿美元新关税后表示:“我认为总统领导的一些政策会唤醒我们在中国的朋友,让他们意识到像往常一样做生意的方式必须改变”。“多年来,中国利用美国人疏于防范的态度,在两国贸易交易中一直作弊”。[11]

万豪董事会成员和前美国贸易代表苏珊施瓦布Susan Schwab也对中国的贸易政策表示担忧

罗姆尼并不是万豪董事会中唯一对中国贸易政策表示担忧的成员。 作为美国贸易代表苏珊施瓦布在美国要求世界贸易组织(WTO)解决磋商与中国贸易争端时表示,“我们不安地发现中国似乎仍在采取世界贸易组织的非法措施来促进其从纺织品,冰箱到啤酒和花生的产品出口。 我们今天去世界贸易组织,决心利用所有可用资源来打击旨在以不公平地牺牲美国工人,农民,牧场主,制造商和知识产权所有者为代价来推广中国品牌产品的产业政策。”[12]

在2008年达沃斯世界经济论坛上,施瓦布指出:“我们与中国存在很大的贸易逆差,我认为这样的贸易失衡是不可持续的。 两国贸易逆差的程度可归因于贸易政策,即表现在非法壁垒,不公平补贴,侵犯知识产权,假冒,盗版。 贸易政策,这才是真正的问题。”[13]

索伦森的歉函中提到承诺确保让万豪中国客户感受到尊重。那万豪为什么仍然保留一个公然对中国采取激进态度的董事会成员呢?

 

[1] “Statement from Arne Sorenson, President and CEO, Marriott International, Inc.,” Marriott News Center, 1/11/18. http://news.marriott.com/2018/01/statement-from-arne-sorenson-president-and-ceo-marriott-international-inc/.

[2] Form DEF-14A, filed by Marriott International, SEC, 4/4/18, p. 24. https://www.sec.gov/Archives/edgar/data/1048286/000119312518085273/d539777dpre14a.htm.

[3] Chris Buckley, “China steps up condemnation of U.S. over Taiwan arms,” Reuters, 9/22/11. https://www.reuters.com/article/us-usa-taiwan/china-steps-up-condemnation-of-u-s-over-taiwan-arms-idUSTRE78L6SU20110922

[4] Mitt Romney, “Statement by Mitt Romney on Taiwan,” University of Santa Barbara – The American Presidency Project, 9/21/11. http://www.presidency.ucsb.edu/ws/?pid=97912.

[5] Tony Liao and Elizabeth Hsu, “U.S. presidential candidate supports arm sales, Taiwan Relations Act,” Focus Taiwan, 8/29/12. http://focustaiwan.tw/news/aipl/201208290023.aspx.

[6] “Transcript And Audio: Third Presidential Debate,” NPR, 10/22/12. https://www.npr.org/2012/10/22/163436694/transcript-3rd-obama-romney-presidential-debate.

[7] “CBS News/NJ debate transcript, part 1,” CBS, 11/13/11, p. 10. https://www.cbsnews.com/news/cbs-news-nj-debate-transcript-part-1/10/.

[8] “Believe In America: Mitt Romney’s Plan for Jobs and Economic Growth,” Romney for President, 2011, p. 69. https://grist.files.wordpress.com/2012/01/believeinamerica-planforjobsandeconomicgrowth-full.pdf.

[9] “Believe In America: Mitt Romney’s Plan for Jobs and Economic Growth,” Romney for President, 2011, p. 7. https://grist.files.wordpress.com/2012/01/believeinamerica-planforjobsandeconomicgrowth-full.pdf.

[10] Mitt Romney (@MittRomney), “China steals our intellectual property and @BarackObama does nothing. We must protect American innovation. Video: http://mi.tt/nT7cBB,” Twitter, 10/13/11, 6.58 AM. https://twitter.com/MittRomney/status/124484116782649346.

[11] Dennis Romboy, “Trump threat of $100 billion tariffs will ‘wake up’ China, Mitt Romney says,” Deseret News, 4/5/18. https://www.deseretnews.com/article/900015093/trump-threat-of-dollar100-billion-tariffs-will-wake-up-china-mitt-romney-says.html.

[12] “United States Files WTO Case Against China Over Illegal Support for Chinese Famous Brands,” US Trade Representative, 12/18/08. https://ustr.gov/about-us/policy-offices/press-office/press-releases/archives/2008/december/united-states-files-wto-case-against-chi.

[13] “USTR: Trade Deficit With China ‘Unsustainable’,” Dow Jones Select, 1/24/08.

Mitt Romney, Marriott board member, repeatedly rattled sabers against China

Public domain image released by the U.S. Navy

In his statement of apology for the January email incident, Marriott CEO Arne Sorenson stated unequivocally, “Marriott International respects and supports the sovereignty and territorial integrity of China.” In light of the tensions between Marriott and China, Sorenson pledged to focus on making sure Marriott’s Chinese guests feel respected.[1]

Mitt Romney has served on the Marriott board for a cumulative 17 years as of 2018, longer than any other board member who is not part of the Marriott family.[2] However, as a candidate for office, he has repeatedly engaged in saber rattling against China, supporting arm sales to Taiwan and proposing a US military build up in the Pacific to counter China.

In an era when corporations increasingly have to craft a delicate foreign policy with China, is Mitt Romney Marriott’s best ambassador?

Romney Supported Arms Sales to Taiwan, Adopted Aggressive Posture Towards China

 In 2011, the Obama administration announced a plan to upgrade Taiwan’s military jets. The Chinese government vigorously protested the arms sales.[3]

Mitt Romney lambasted the administration’s move, and stated, “President Obama’s refusal to sell Taiwan new military jets is yet another example of his weak leadership in foreign policy. Every American president for the past three decades – both Republican and Democrat – has recognized our interest in helping Taiwan defend itself. In the face of China’s intensive military buildup, the United States needs the strongest possible partnerships in Asia.”[4] John Chiang, a vice chairman of Taiwan’s ruling Kuomintang, applauded Romney’s stance on arm sales to Taiwan, calling it “good news.” [5]

Romney Accused China of Theft, and of Conducting a ‘Silent’ Trade War

During the 2012 presidential election, Romney claimed that China was carrying on a trade war under the radar: “It’s a silent one and they’re winning.”[6]

Romney said, in response to a question about how he would manage China to avoid a 21st century Cold War, “They can’t hack into our computer systems and steal from our government. They can’t steal from corporations. They can’t take patents and designs, intellectual property, and– and– and– and duplicate them– and duplicate them and counterfeit them and sell them around the world.”[7]

A tenet of Romney’s trade policy during his Presidential campaign was “Confronting China.”[8] One of the items on his list of executive orders for Day One included “An Order to Sanction China for Unfair Trade Practices,” which “Directs the Department of the Treasury to list China as a currency manipulator in its biannual report and directs the Department of Commerce to assess countervailing duties on Chinese imports if China does not quickly move to float its currency.”[9]

During the 2012 election campaign, Romney tweeted that China stole U.S. intellectual property.[10]

During his 2018 Senate campaign, Romney said after President Trump proposed $100 billion in new tariffs on China: “I think the president is leading with some policies that will wake up our friends in China and they’ll recognize that business as usual is going to have to change.” “China over the years has taken advantage of the attitude in America, which is we haven’t watched very closely and they’ve been cheating.”[11]

Marriott Board Member and former US Trade Representative Susan Schwab has also cited concern about China’s trading policies

Romney is not the only member of Marriott’s board to express concern about China’s trade policy.  As US Trade Representative, Susan Schwab stated when the US requested World Trade Organization (WTO) dispute settlement consultations with the People’s Republic of China, “We were disturbed to find that China still appears to be using WTO-illegal measures to promote its exports, ranging from textiles and refrigerators to beer and peanuts.  We are going to the WTO today because we are determined to use all resources available to fight industrial policies that aim to unfairly promote Chinese branded products at the expense of American workers, farmers, ranchers, manufacturers and intellectual property owners.”[12]

In 2008 at the World Economic Forum in Davos, Schwab noted: “We have a very large and, I would argue, unsustainable trade imbalance with China. To the extent that the imbalance could be attributed to trade policy – meaning illegal barriers, unfair subsidies, violations of intellectual property rights, counterfeiting, piracy – then that’s a real problem.”[13]

Sorenson’s apology included a commitment to making sure Marriott’s Chinese guests feel respected. Why has Marriott kept a board member who has taken an aggressive public stance against a key Marriott market?

 

[1] “Statement from Arne Sorenson, President and CEO, Marriott International, Inc.,” Marriott News Center, 1/11/18. http://news.marriott.com/2018/01/statement-from-arne-sorenson-president-and-ceo-marriott-international-inc/.

[2] Form DEF-14A, filed by Marriott International, SEC, 4/4/18, p. 24. https://www.sec.gov/Archives/edgar/data/1048286/000119312518085273/d539777dpre14a.htm.

[3] Chris Buckley, “China steps up condemnation of U.S. over Taiwan arms,” Reuters, 9/22/11. https://www.reuters.com/article/us-usa-taiwan/china-steps-up-condemnation-of-u-s-over-taiwan-arms-idUSTRE78L6SU20110922

[4] Mitt Romney, “Statement by Mitt Romney on Taiwan,” University of Santa Barbara – The American Presidency Project, 9/21/11. http://www.presidency.ucsb.edu/ws/?pid=97912.

[5] Tony Liao and Elizabeth Hsu, “U.S. presidential candidate supports arm sales, Taiwan Relations Act,” Focus Taiwan, 8/29/12. http://focustaiwan.tw/news/aipl/201208290023.aspx.

[6] “Transcript And Audio: Third Presidential Debate,” NPR, 10/22/12. https://www.npr.org/2012/10/22/163436694/transcript-3rd-obama-romney-presidential-debate.

[7] “CBS News/NJ debate transcript, part 1,” CBS, 11/13/11, p. 10. https://www.cbsnews.com/news/cbs-news-nj-debate-transcript-part-1/10/.

[8] “Believe In America: Mitt Romney’s Plan for Jobs and Economic Growth,” Romney for President, 2011, p. 69. https://grist.files.wordpress.com/2012/01/believeinamerica-planforjobsandeconomicgrowth-full.pdf.

[9] “Believe In America: Mitt Romney’s Plan for Jobs and Economic Growth,” Romney for President, 2011, p. 7. https://grist.files.wordpress.com/2012/01/believeinamerica-planforjobsandeconomicgrowth-full.pdf.

[10] Mitt Romney (@MittRomney), “China steals our intellectual property and @BarackObama does nothing. We must protect American innovation. Video: http://mi.tt/nT7cBB,” Twitter, 10/13/11, 6.58 AM. https://twitter.com/MittRomney/status/124484116782649346.

[11] Dennis Romboy, “Trump threat of $100 billion tariffs will ‘wake up’ China, Mitt Romney says,” Deseret News, 4/5/18. https://www.deseretnews.com/article/900015093/trump-threat-of-dollar100-billion-tariffs-will-wake-up-china-mitt-romney-says.html.

[12] “United States Files WTO Case Against China Over Illegal Support for Chinese Famous Brands,” US Trade Representative, 12/18/08. https://ustr.gov/about-us/policy-offices/press-office/press-releases/archives/2008/december/united-states-files-wto-case-against-chi.

[13] “USTR: Trade Deficit With China ‘Unsustainable’,” Dow Jones Select, 1/24/08.

Who are Marriott’s key owners in China?

Marriott’s growth in China will depend on partnerships to build and operate hotels. But who are these partners?

We have compiled a list of six key owners of Marriott hotels in China. The following graphic is a summary of their respective Marriott hotels portfolio.

Overall, these six companies combined developed around 16% of all Marriott hotels in China.  Marriott divides its hotels brands into three tiers: luxury, premium, and select.[i] The following graphic summarizes the percentage of existing Marriott hotels in China owned by the six companies, broken down by tiers.

We believe this is the first English-language list produced of Marriott’s Chinese partners. This list doesn’t include Dossen, the hotel company which signed an agreement to develop Marriott’s Fairfield brand in China; that deal will be explored in depth in a future series.

 

R&F Properties

  • Number of Marriott Hotels Owned: 14
  • Number of Marriott Hotels in Development: 4

R&F Properties was part of the elite group of Chinese real estate developers known as the “Five South China Tigers” for their aggressive business style. R&F listed on the Hong Kong Exchange in 2005. [ii] The company made a number of significant high-profile purchases in 2017, including the purchase of 73 of Wanda’s mainland hotels and its London hotel project.[iii] [iv] In March 2018, R&F Properties reportedly purchased one of HNA’s Hainan properties; HNA declined to comment on the reported purchase.[v]

 

Greentown China

  • Number of Marriott Hotels Owned: 9
  • Number of Marriott Hotels in Development: 2

Greentown China is the tenth largest real estate developer in China in terms of contracted sales.[vi] The company’s top 3 shareholders were the state-owned China Communications Construction Group, the Wharf Holdings, and founder Song Weiping.[vii] Greentown China reportedly was on the verge of bankruptcy in 2015, before the China Communications Construction Group became the largest shareholder.[viii]

 

Greenland Holdings

  • Number of Marriott Hotels Owned: 6
  • Number of Marriott Hotels in Development: 3

Greenland Holdings is the sixth largest real-estate developer in China in terms of contracted sales in January 2018.[ix] In the U.S., Greenland constructed the massive Metropolis condo and hotel complex in downtown Los Angeles.[x] In 2016, Greenland affiliate Shanghai Yunfeng Group Co. was in default on 2 billion yuan of privately placed notes after the triggering of early repayment clauses.[xi] In 2017, the company revealed that its subsidiaries in the Liaoning Province had overdue loans of around $69.2 million.[xii]

In March 2018, the company put two buildings in the Metropolis complex up for sale; the CEO of Greenland’s US subsidiary expected completion of the final tower in 2019.[xiii] In April 2018, Nikkei Asian Review reported that the group’s shares fell 5.7% after reporting a 19% drop in first-quarter contracted sales at 5.7 billion yuan.[xiv]

 

Jinmao

  • Number of Marriott Hotels Owned: 6
  • Number of Marriott Hotels in Development: 1

China Jinmao is the property arm of the state-owned chemical group Sinochem.[xv] One of the real-estate group’s most famous properties is the Jin Mao Tower in Shanghai, at one point Shanghai’s tallest building.[xvi] In October 2017, the Hong Kong office of Jinmao reportedly was searched by Hong Kong’s Independent Commission Against Corruption (ICAC) as part of an investigation into bribery; the company’s CFO was asked to visit the ICAC office. The company stated that neither the company nor any of its units are subjects of the investigations.[xvii] JP Morgan downgraded the company to ‘neutral’ from ‘overweight’ and stated, “Without clarity on any of the details, we believe corporate governance risk will remain high and advise investors to be cautious on the name.”[xviii]

 

Powerlong

  • Number of Marriott Hotels Owned: 6
  • Number of Marriott Hotels in Development: 1

Powerlong, a conglomerate with real estate interests,[xix] was founded in 1992 by Hoi Kin Hong, father of the current CEO Hoi Wa Fong.[xx] The company listed on the Hong Kong Exchange (HK.1238) in 2009.[xxi]

Hong Kong’s Securities and Futures Commission (SFC) fined two units of the Industrial and Commercial Bank of China for their role in the Powerlong IPO, for which they had acted as joint sponsor and joint lead manager.[xxii] According to the law firm Deacons, the investigation followed from an anonymous complaint which alleged that ICBCI Securities procured nominee accounts to subscribe for Powerlong’s offer shares and that such subscriptions were financed by Powerlong.[xxiii] The findings of the SFC were summarized by Reuters:

“The SFC said the two units of ICBC failed to conduct so-called “know-your-client” due diligence on some buyers of Powerlong shares to make sure they were independent of the issuer.

The regulator also said that some buyers were offered margin financing in excess of the buyers’ net worth in a bid to prevent the listing from falling through.”[xxiv]

In particular, Deacons reported that the SFC investigation revealed that some of the placees were friends and families introduced by Powerlong. [xxv]

 

HNA

  • Number of Marriott Hotels Owned: 4
  • Number of Marriott Hotels in Development: 4

HNA was founded in 1993 by Chen Feng as a provincial airline company under the name Hainan Airlines.[xxvi] [xxvii] The company has evolved into a colossal global conglomerate through a series of debt-financed foreign acquisitions – the company held $150 billion of assets in 2016.[xxviii] A prolific deal-maker, HNA purchased a 25% stake in Hilton Worldwide and a 10% stake in Deutsche Bank.[xxix] However, news reports state that HNA has been facing an increasing amount of pressure from its lenders after missed payments in January 2018.[xxx] [xxxi] The company has been looking to sell various parts of its foreign assets since then: it has sold approximately one-fifth of its holding in Deutsche Bank, and announced that it plans on selling all or part of its holdings in Hilton in April 2018.[xxxii] [xxxiii]

 

[i] Marriott International, FORM 10-K (Fiscal Year 2016), p. 5, retrieved May 3rd, 2018, https://www.sec.gov/Archives/edgar/data/1048286/000162828018001756/mar-q42017x10k.htm

[ii] R&F Properties, Group Profile, retrieved May 1st, 2018, http://www.rfchina.com/template/Yabout.aspx

[iii] Caixin (2018 March 20th), R&F Expects $126 Million Revenue This Year From Former Wanda Hotels, retrieved May 3rd, 2018, https://www.caixinglobal.com/2018-03-20/rf-expects-126-million-revenue-this-year-from-former-wanda-hotels-101223819.html

[iv] Bloomberg (2018, January 16th), Dalian Wanda Sells Its London Towers, retrieved May 1st, 2018, https://www.bloomberg.com/news/articles/2018-01-16/dalian-wanda-is-said-to-sell-london-homes-hotel-project-to-r-f

[v] Ecns.cn (2018, March 21st), HNA sells assets across China, retrieved May 1st, 2018, http://www.ecns.cn/business/2018/03-21/296563.shtml

[vi] South China Morning Post (2018, January 2nd), Top Chinese developers tighten grip on housing market despite overall slowdown, retrieved May 1st, 2018, http://www.scmp.com/property/hong-kong-china/article/2126531/top-chinese-developers-tighten-grip-housing-market-despite

[vii] South China Morning Post (2017,  April 18th), Chinese developer Greentown China Holdings expects 2017 to be a window for land acquisitions, retrieved May 1st, 2018, http://www.scmp.com/business/article/2088213/chinese-developer-greentown-china-holdings-expects-2017-be-window-land

[viii] South China Morning Post (2017,  August 28th), Developer Greentown sees dramatic turnaround in fortunes after major disposals, retrieved May 1st, 2018, http://www.scmp.com/business/companies/article/2108539/developer-greentown-continues-enjoy-dramatic-turnaround-fortunes

[ix] South China Morning Post (2018, January 2nd), Top Chinese developers tighten grip on housing market despite overall slowdown, retrieved May 1st, 2018, http://www.scmp.com/property/hong-kong-china/article/2126531/top-chinese-developers-tighten-grip-housing-market-despite

[x] Los Angeles Times (2017, July 13th), Massive Metropolis condo complex ushers in a new era of residential development in downtown L.A., retrieved May 2nd 2018, http://www.latimes.com/business/la-fi-metropolis-phase-one-20170713-story.html

[xi] Bloomberg (2017, August 29th), China’s 4th Biggest Builder Discloses Overdue Debt, retrieved May 2nd, 2018, https://www.bloomberg.com/news/articles/2017-08-29/china-s-4th-biggest-builder-discloses-overdue-debt-in-first-half

[xii] Bloomberg (2017, August 29th), China’s 4th Biggest Builder Discloses Overdue Debt, retrieved May 2nd, 2018, https://www.bloomberg.com/news/articles/2017-08-29/china-s-4th-biggest-builder-discloses-overdue-debt-in-first-half

[xiii] Los Angeles Downtown News (2018, March 5th), Two Buildings in Metropolis Hit the Market, retrieved May 2nd, 2018, http://www.ladowntownnews.com/news/two-buildings-in-metropolis-hit-the-market/article_ea57e0e2-1e65-11e8-9ff9-6bb1438d8def.html

[xiv] Nikkei Asian Review (2018, April 11th), Hong Kong shares rise for fourth day after Yi Gang’s speech, retrieved May 2nd, 2018, https://asia.nikkei.com/Business/Markets/Nikkei-Markets/Hong-Kong-shares-rise-for-fourth-day-after-Yi-Gang-s-speech

[xv] Financial Times (2017, October 24th), China Jinmao CFO asked to visit HK anti-graft agency as offices searched, retrieved May 1st, 2018, https://www.ft.com/content/74394a73-ce16-3cbe-ba29-648450f40203

[xvi] South China Morning Post (2017, October 25th), Chinese developer Jinmao searched by Hong Kong’s anti-graft agency, retrieved May 1st, 2018, http://www.scmp.com/business/article/2116899/chinese-developer-jinmao-searched-hong-kongs-anti-graft-agency

[xvii] South China Morning Post (2017, October 25th), Chinese developer Jinmao searched by Hong Kong’s anti-graft agency, retrieved May 1st, 2018, http://www.scmp.com/business/article/2116899/chinese-developer-jinmao-searched-hong-kongs-anti-graft-agency

[xviii] South China Morning Post (2017, October 25th), Chinese developer Jinmao searched by Hong Kong’s anti-graft agency, retrieved May 1st, 2018, http://www.scmp.com/business/article/2116899/chinese-developer-jinmao-searched-hong-kongs-anti-graft-agency

[xix] “Company Profile,” Powerlong, retrieved 5/3/18. http://www.powerlong.com/about/about!company.action.

[xx] Powerlong, Board of Directors, retrieved May 1st, 2018, http://www.powerlong.com/irm/irm-govern!direct.action

[xxi] The Wall Street Journal (2009, October 15th), Powerlong Posts Modest IPO Debut, retrieved May 1st, 2018, https://www.wsj.com/articles/SB125551792581984599

[xxii] Reuters (2014, May 21st), UPDATE 1-HK fines, reprimands ICBC units for role in 2009 IPO, retrieved May 1st, 2018 https://www.reuters.com/article/hongkong-icbc-fine/update-1-hk-fines-reprimands-icbc-units-for-role-in-2009-ipo-idUSL3N0O72M720140521

[xxiii] Deacons (2014, June 9th), Lesson learned from a recent disciplinary action by SFC – Don’t go too far in facilitating a share offer, retrieved May 1st, 2018, http://www.deacons.com.hk/news-and-insights/publications/lesson-learned-from-a-recent-disciplinary-action-by-sfc.html

[xxiv] Reuters (2014, May 21st), UPDATE 1-HK fines, reprimands ICBC units for role in 2009 IPO, retrieved May 1st, 2018 https://www.reuters.com/article/hongkong-icbc-fine/update-1-hk-fines-reprimands-icbc-units-for-role-in-2009-ipo-idUSL3N0O72M720140521

[xxv] Deacons (2014, June 9th), Lesson learned from a recent disciplinary action by SFC – Don’t go too far in facilitating a share offer, retrieved May 1st, 2018, http://www.deacons.com.hk/news-and-insights/publications/lesson-learned-from-a-recent-disciplinary-action-by-sfc.html

[xxvi] HNA, History, retrieved May 1st, 2018, http://www.hnagroup.com/en-us/who-we-are/development-history/

[xxvii] Financial Times (2017, June 2nd), Who owns HNA, China’s most aggressive dealmaker?, retrieved May 3rd, 2018, https://www.ft.com/content/8acfe40e-410b-11e7-9d56-25f963e998b2

 [xxviii] Bloomberg (2017, August 2nd), The Conglomerate That Troubles China , retrieved May 1st, 2018, https://www.bloomberg.com/news/articles/2017-08-02/the-conglomerate-that-troubles-china

[xxix] Bloomberg (2017, August 2nd), The Conglomerate That Troubles China , retrieved May 1st, 2018, https://www.bloomberg.com/news/articles/2017-08-02/the-conglomerate-that-troubles-china

[xxx] Bloomberg (2018, January 5th), HNA Units Missed Payments to More Chinese Banks, retrieved May 1st, 2018, https://www.bloomberg.com/news/articles/2018-01-05/hna-units-are-said-to-have-missed-payments-to-more-chinese-banks-jc1t4qfi

[xxxi] Bloomberg (2018, January 24th), China’s Beleaguered HNA Group Faces a Debt Wall in Second Half, retrieved May 1st, 2018, https://www.bloomberg.com/news/articles/2018-01-24/china-s-beleaguered-hna-group-faces-a-debt-wall-in-second-half

[xxxii] CNN (2018, April 23rd), A major Chinese investor just cut its Deutsche Bank stake, retrieved May 1st, 2018, http://money.cnn.com/2018/04/23/news/companies/hna-trims-deutsche-bank-stake/index.html

[xxxiii] Bloomberg, (2018, April 5th), HNA Wants to Sell Its $6.5 Billion Hilton Stake, retrieved May 1st, 2018, https://www.bloomberg.com/news/articles/2018-04-05/hna-seeks-to-sell-hilton-stake-amid-global-property-selloff

Romance of the Three Kingdoms: Marriott’s China Ambitions Caught in Struggle Between Tech Giants

(Saam Gwok 262 CE by Ian Kiu – CC BY 3.0)

In a previous post, we discussed how Marriott and Alibaba agreed to promote Marriott in China through Alibaba’s subsidiary Fliggy at the same time that the partnership between Marriott and Ctrip, the leader of the Chinese online travel market, was unraveling. The competition between Ctrip and Fliggy is a microcosm of a much larger on-going battle between three Chinese tech giants: Baidu, Alibaba, and Tencent (the trio is often referred to as BAT).[i]

This post offers an overview of how the competition between these giants has played out in various sectors of the Chinese tech industry, and in particular within the online travel agent (OTA) market. While Marriott has allied itself with Alibaba and Fliggy, the larger struggle for market dominance raises many challenges for the Bethesda-based company. With Fliggy’s competitors commanding over 90% of Chinese online lodging bookings, what are the implications for Marriott? [ii]

Baidu – Alibaba – Tencent

Although these three companies compete in multiple areas, they each have a different core business. Baidu, often compared to Google, is the operator of Baidu.com, China’s leading search engine with a 73% market share.[iii] [iv] The primary business of Alibaba, the “Amazon of China,” is e-commerce.[v] [vi] Tencent, which operates the social media app WeChat, temporarily surpassed Facebook in November 2017 to become the world’s fifth largest public company by market value.[vii]

Each of the three Chinese giants operates and invests in a large variety of sectors complimentary to its core business, leading to fierce competition.[viii] In recent years, the three companies and their allies have fought over dominance in industries as diverse as food delivery, bike sharing, and trucking.[ix] [x] [xi] Bloomberg labeled a running battle between rival trucking apps backed by Tencent and the head of Alibaba as “toxic.” [xii]

A key area of competition between the BAT companies is payment systems. Alibaba introduced its payment system Alipay in 2004 to facilitate transactions between buyers and sellers using its platform.[xiii] In 2013, Tencent created its own payment system WeChat Pay; Alipay saw its share of mobile transactions by value fall from 80% to 54% in the three years between 2014 to 2017.[xiv] Baidu launched its own mobile payment service in 2014.[xv]

According to CB Insights, over 40% of the “unicorns” in China – privately held companies worth over $1 billion – are backed by Baidu, Alibaba, Tencent, and the e-commerce company JD.com, or their affiliates.[xvi] The latter, a competitor of Alibaba in the retail sector, is itself backed by Tencent.[xvii] [xviii]

The Baidu – Tencent Alliance in Online Travel

Between the three companies, in 2016 Tencent earned the most revenue and profit, followed by Alibaba and Baidu.[xix] However, Baidu is the largest shareholder in Ctrip,[xx] the leader in the Chinese online travel market with a 65% market share (compared to Fliggy’s 15%).[xxi]

Over the past two years, Ctrip made a series of major acquisitions in the online travel industry, including its OTA rival Qunar, and the travel search site Skyscanner.[xxii] In an interview with China Daily, Ctrip’s CEO stated that the company is successfully digesting recent acquisitions and is poised to capture a bigger slice of the business travel market from the country.[xxiii]

What could further bolster Ctrip’s dominance in the OTA sector is its alliance with Tencent. On December 29th, 2017, Ctrip announced that two of its portfolio companies, Toncheng Network and eLong, agreed to merge as Tongcheng-eLong.[xxiv] According to Ctrip’s press release, Ctrip and Tencent planned to act as strategic major shareholders of the company, and the merger will enable the new company to provide wider traveler coverage and deliver greater online travel services and products while benefiting from significant traffic via Tencent’s WeChat and Mobile QQ platforms.[xxv]

The synergistic relationship between Baidu’s Ctrip and Tencent is further strengthened by their mutual connection to the Priceline Group. The Priceline Group has been a partner of Ctrip since 2012, and invested $500 million in Ctrip via convertible bonds in 2015.[xxvi] Tencent is a major backer of Meituan-Dianping, a startup operating a wide variety of business including delivery, local business reviews, and discounted group-buy (similar to Groupon).[xxvii] Meituan-Dianping launched its travel service Meituan Travel in 2017.[xxviii] Following the launch of Meituan Travel, Priceline became a backer of Meituan-Dianping, and Meituan Travel entered into a partnership agreement with Priceline’s Agoda.com. [xxix]

Online Lodging Booking: The Turf of Baidu and Tencent

2016 Chinese Online Lodging Market Share (by Trade Volume). Source: iResearch [xxxi]

This network of interests between Baidu, Ctrip, and Tencent represents a significant challenge to Fliggy’s attempt to grow in the Chinese OTA market, especially when it comes to online hotel bookings. According to a study by the Chinese consulting group iResearch, the various OTA portals operated by Ctrip, Tencent and their affliates occupies an overwhelming majority of the online lodging booking market. The combination of Ctrip, Qunar, Meituan, eLong, and Toncheng corresponds to 94.1% of the total trade volume in term of online lodging bookings.[xxx] The report did not specify the market share of Fliggy, and instead includes it in the category “Other,” which represents a total of 2.5% of total online lodging bookings.

Fliggy is at a disadvantage in the Chinese OTA market against the combined forces of Baidu, Ctrip, and Tencent.

 

[i] Bloomberg (2017, June 27th), Tech Titans in China Take Their Battle to a New Frontier, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-06-27/china-s-tech-titans-take-their-battle-to-a-new-frontier-travel

[ii] iResearch, 2017年中国在线旅游度假行业研究报告, p. 20, retrieved April 25th, 2018, http://report.iresearch.cn/report_pdf.aspx?id=3025

[iii] Investopedia, Baidu Vs. Google: How Are They Different?, retrieved April 25th, 2018, https://www.investopedia.com/articles/investing/051215/baidu-vs-google-how-are-they-different.asp

[iv] Statcounter, Search Engine Market Share China: Mar 2017 – Mar 2018, retrieved April 25th, 2018, http://gs.statcounter.com/search-engine-market-share/all/china

[v] Investopedia, Understanding Alibaba’s Business Model, retrieved April 17th, 2018, https://www.investopedia.com/articles/investing/062315/understanding-alibabas-business-model.asp

[vi] The Sydney Morning Herald (2017, August 27th), ‘Amazon of China’ Alibaba already has supermarkets. Now it wants our food, retrieved April 17th, 2018, http://www.smh.com.au/business/retail/alibaba-already-has-supermarkets-now-it-wants-our-food-20170825-gy4aqf.html

[vii] Bloomberg (2017, November 21st), Tencent’s $292 Billion Rally Ousts Facebook From Global Top Five, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-11-21/tencent-s-292-billion-rally-ousts-facebook-from-global-top-five

[viii] The Economist (2017, April 20th), China’s internet giants go global, retrieved April 25th, 2018, https://www.economist.com/news/business/21721203-tencent-leading-acquisition-spree-alibaba-close-second-chinas-internet-giants-go

[ix] Bloomberg (2017, May 25th), Alibaba to Lead $1 Billion Funding for Chinese Food Startup, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-05-25/alibaba-said-to-lead-1-billion-funding-for-chinese-food-startup

[x] Bloomberg (2017, April 26th), Chinese Bike Wars Drive Didi, Tencent Into Rival Camps, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-04-27/china-s-bike-wars-escalate-as-didi-throws-weight-behind-ofo

[xi] Bloomberg (2017, October 25th), China’s Uber-for-Trucks Apps Trade Barbs as Battle Turns Toxic, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-10-25/china-s-uber-for-trucks-apps-trade-barbs-as-battle-turns-toxic

[xii] Bloomberg (2017, October 25th), China’s Uber-for-Trucks Apps Trade Barbs as Battle Turns Toxic, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-10-25/china-s-uber-for-trucks-apps-trade-barbs-as-battle-turns-toxic

[xiii] Quartz (2014, June 16th), Alibaba has a new way of explaining its controversial Alipay spinoff, retrieved April 25th, 2018, https://qz.com/221635/alibaba-has-a-new-way-of-explaining-its-controversial-alipay-spinoff/

[xiv] Technode (2017, August 18), Alipay vs WeChat: Challenges and strategies of two payment giants going global, retrieved April 25th, 2018, https://technode.com/2017/08/18/alipay-vs-wechat-challenges-and-strategies-of-two-payment-giants-going-global/

[xv] TechInAsia (2014, April 16th), Baidu dives into China’s mobile payments war, jabs Alibaba with launch of Baidu Wallet, retrieved April 25th, 2018, https://www.techinasia.com/baidu-dives-into-chinas-mobile-payments-war-jabs-alibaba-with-the-launch-of-baidu-wallet

[xvi] CBInsights (2017, May 19th), Nearly Half Of China’s Unicorns Backed By Baidu, Alibaba, Tencent, Or JD.com, retrieved April 25th, 2018, https://www.cbinsights.com/research/asian-unicorns-baidu-alibaba-tencent-jd-investors/

[xvii] JD.com, FORM 20-F (Fiscal Year 2016), retrieved April 25th, 2018, p.12,

https://www.sec.gov/Archives/edgar/data/1549802/000110465917028187/a17-4445_120f.htm

[xviii] The Wall Street Journal (2014, March 10th), Tencent Buys Into JD.com, retrieved April 25th, 2018, https://www.wsj.com/articles/tencent-to-take-about-15-stake-in-jd-com-1394415548

[xix] The Economist (2017, April 20th), China’s internet giants go global, retrieved April 25th, 2018, https://www.economist.com/news/business/21721203-tencent-leading-acquisition-spree-alibaba-close-second-chinas-internet-giants-go

[xx] Ctrip.com, FORM 20-F (Fiscal Year 2016), p.67, retrieved April 25th, 2018, http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc0Mjg2fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636277375345954893

[xxi] Thomas Cook (2017, September 17th), THOMAS COOK CHINA STRATEGY UPDATE, pp. 4 and 15, retrieved April 18th, 2018, https://www.thomascookgroup.com/wp-content/uploads/2017/09/Thomas-Cook-China_Morgan-Stanley-Investor-Trip_19.09.17_v-FINAL.pdf

[xxii] China Daily (2017, March 3rd), Ctrip CEO says acquisitions starting to pay off, retrieved April 25th, 2018, http://usa.chinadaily.com.cn/business/2017-03/03/content_28415728.htm

[xxiii] China Daily (2017, March 3rd), Ctrip CEO says acquisitions starting to pay off, retrieved April 25th, 2018, http://usa.chinadaily.com.cn/business/2017-03/03/content_28415728.htm

[xxiv] Ctrip.com International (2017, December 29th), Ctrip’s Invested Companies, eLong and Tongcheng Network, Announce Agreement to Merge, retrieved April 25th, 2018, https://www.prnewswire.com/news-releases/ctrips-invested-companies-elong-and-tongcheng-network-announce-agreement-to-merge-300576010.html

[xxv] Ctrip.com International (2017, December 29th), Ctrip’s Invested Companies, eLong and Tongcheng Network, Announce Agreement to Merge, retrieved April 25th, 2018, https://www.prnewswire.com/news-releases/ctrips-invested-companies-elong-and-tongcheng-network-announce-agreement-to-merge-300576010.html

[xxvi] Ctrip.com International (2015, December 10th), Ctrip Announces Investment by The Priceline Group and a Long-Term Equity Investment Firm, retrieved May 2nd, 2018, http://ir.ctrip.com/phoenix.zhtml?c=148903&p=irol-newsArticle&ID=2121699

[xxvii] Bloomberg (2017, October 19th), This Little-Known Startup Just Hit a Valuation of $30 Billion, retrieved April 25th, 2018, https://www.bloomberg.com/news/articles/2017-10-19/china-s-meituan-raises-4-billion-at-30-billion-valuation

[xxviii] Meituan-Dianping (2017, May 22nd), Meituan-Dianping Cements Its Market Leading Position in the Travel and Leisure Industry with the Official Launch of Meituan Travel, retrieved May 2nd, 2018, https://www.prnewswire.com/news-releases/meituan-dianping-cements-its-market-leading-position-in-the-travel-and-leisure-industry-with-the-official-launch-of-meituan-travel-300461260.html

[xxix] Tnooz (2017, October 19th), Priceline Group hedges its Chinese bets with Meituan Travel tie-up, retrieved Aril 25th, 2018, https://www.tnooz.com/article/priceline-group-hedges-its-chinese-bets-with-meituan-travel-tie-up/

[xxx] iResearch, 2017年中国在线旅游度假行业研究报告, p. 20, retrieved April 25th, 2018, http://report.iresearch.cn/report_pdf.aspx?id=3025

[xxxi] iResearch, 2017年中国在线旅游度假行业研究报告, p. 20, retrieved April 25th, 2018, http://report.iresearch.cn/report_pdf.aspx?id=3025

Downranked by Largest Chinese Travel Agency, Marriott Tried Again with Smaller Competitor

In August 2017, Marriott International announced a joint venture with the Chinese tech giant Alibaba and its subsidiary Fliggy. The joint venture would market Marriott to Alibaba’s Chinese customer base, and Alibaba would eventually run Marriott’s Chinese-language websites and apps.[i] [ii] Coverage in Western media outlets touted how the deal could enable Marriott to reach millions of Chinese travelers.[iii] [iv] [v] [vi] Marriott’s stock shot up 1.1% on the news.[vii]

But the U.S. press did not report that the Alibaba deal came in the wake of a conflict between Marriott and Ctrip, the most dominant player in the Chinese online travel industry. Ctrip held what has been described as a “near monopoly.”[viii] [ix] A report by Thomas Cook in September 2017 estimated Ctrip’s share of the online travel market at 65%, compared to Fliggy’s 15%.[x] Ctrip had inked an agreement with Marriott with similar features to the deal with Alibaba. However, the relationship between Marriott and Ctrip was unraveling at the time of the Alibaba deal, and would conclude only a few months later.

Despite the positive coverage, it is not clear if the Alibaba deal represented a step forward for Marriott, or a step back.

Marriott-Ctrip relationship unraveled after revelation of price disparity

In October 2010, Marriott and Ctrip signed an agreement that made Ctrip Marriott’s first online travel agency partner in China. The deal enabled Chinese travelers booking hotels through Ctrip to receive the same specials and rates found on Marriott.com.[xi] The agreement was expanded in 2012 with the announcement of a joint reward program between Marriott and Ctrip.[xii]

But in June 2017, users of the Chinese social media platform Weibo reported that Ctrip had downranked all of Marriott’s properties, which meant that Marriott hotels were pushed to the bottom of searches.[xiii] Following the report, journalists from scxxb.com.cn [市场信息网] confirmed that on Ctrip’s official app, Marriott’s hotels were ranked last on both Ctrip’s popularity ranking and review score ranking.[xiv]

The Guangzhou-based Time Weekly reported that, prior to the downranking, Marriott had been providing extra rebates for travelers choosing to book from Marriott directly instead of via third parties. The revelation of the price disparity damaged the Marriott-Ctrip relationship and prompted retaliatory actions from Ctrip.[xv]

Marriott announced its deal with Alibaba in August 2017.[xvi] In November 2017, three months after the Marriott-Alibaba deal, the Marriott-Ctrip joint reward program ended.[xvii]

In early April 2018, nearly one year after Ctrip first downranked Marriott hotels, a search for hotels in Shanghai on Ctrip returned no Marriott hotels on the first page.[xviii] Marriott hotels were similarly absent from the Shanghai hotel listing of the Ctrip affiliated travel websites Qunar and eLong.[xix] [xx] In contrast, on Alibaba’s Fliggy, the Renaissance Shanghai Yu Garden was ranked number one among all hotels in Shanghai.[xxi]

On the left: Top 10 search results for hotels in Shanghai on Ctrip. On the right: Top 10 search results for hotels in Shanghai on Fliggy

 

After Ctrip Agreement Expiration, Marriott Reliant on Much Smaller Alibaba

What has happened since the Marriott-Ctrip agreement expired?

In January 2018, all of Marriott’s Chinese-language websites were taken offline after Marriott sent an email to Chinese customers listing Tibet, Hong Kong and Macau as countries.[xxii] As of April 16, 2018, Marriott’s Chinese-language webpage still doesn’t have a direct-booking feature; the webpage instead redirects visitors to other booking systems such as Marriott’s Chinese language smartphone app or its international website in English.[xxiii]

The Marriott-Alibaba deal entrusted Marriott’s future Chinese online presence in the partnership with Alibaba. Fliggy was actually Alibaba’s third entry into the online travel business, after two previous companies were rebranded.[xxiv]

The questions that arise after a careful examination of Marriott’s Ctrip experience are:

  • As Marriott seeks to cut the commission fees from online agencies, what will happen to its relationship with Alibaba?[xxv]
  • If Ctrip maintains its dominance over the Chinese online travel market, will Marriott be able to regain its lost market access?

 

[i] Marriott International (2017, August 7th), Alibaba Group and Marriott International Announce Innovative Joint Venture to Redefine Travel Experience, retrieved April 18th, 2018, http://news.marriott.com/2017/08/alibaba-group-marriott-international-announce-innovative-joint-venture-redefine-travel-experience/

[ii] Reuters (2017, August 7th), Marriott set to woo Chinese tourists with Alibaba deal, retrieved April 18th, 2018, https://www.reuters.com/article/us-marriott-intnl-alibaba/marriott-set-to-woo-chinese-tourists-with-alibaba-deal-idUSKBN1AN1JN

[iii] Reuters (2017, August 7th), Marriott set to woo Chinese tourists with Alibaba deal, retrieved April 18th, 2018, https://www.reuters.com/article/us-marriott-intnl-alibaba/marriott-set-to-woo-chinese-tourists-with-alibaba-deal-idUSKBN1AN1JN

[iv] Barron’s (2017, August 7th), Alibaba & Marriott Form JV To Tap Millions of Travelers, retrieved April 18th, 2018, https://www.barrons.com/articles/alibaba-marriott-form-jv-to-tap-millions-of-travelers-1502111778

[v] The Wall Street Journal (2017, August 7th), Alibaba, Marriott Team Up to Serve Chinese Tourists Abroad, retrieved April 17th, 2018, https://www.wsj.com/articles/alibaba-marriott-team-up-to-serve-chinese-tourists-abroad-1502103604?mod=searchresults&page=1&pos=3

[vi] Bloomberg (2017, August 7th), Alibaba, Marriott Will Team Up to Tap a Chinese Tourism Boom, retrieved April 18th, 2018, https://www.bloomberg.com/news/articles/2017-08-07/alibaba-marriott-will-team-up-to-tap-a-chinese-tourism-boom

[vii] Bloomberg (2017, August 7th), Alibaba, Marriott Will Team Up to Tap a Chinese Tourism Boom, retrieved April 18th, 2018, https://www.bloomberg.com/news/articles/2017-08-07/alibaba-marriott-will-team-up-to-tap-a-chinese-tourism-boom

[viii] CNBC (2017, May 10th), Market consolidation allowed China’s Ctrip to realize ‘monopoly power’, retrieved April 18th, 2018, https://www.cnbc.com/video/2017/05/10/market-consolidation-allowed-chinas-ctrip-to-realize-monopoly-power.html

[ix] Economic Times (2017, February 23rd), Chinese travel major Ctrip maps route to become China’s next web giant , retrieved April 18th, 2018, https://tech.economictimes.indiatimes.com/news/internet/chinese-travel-major-ctrip-maps-route-to-become-chinas-next-web-giant/57314196

[x] Thomas Cook (2017, September 17th), THOMAS COOK CHINA STRATEGY UPDATE, pgs. 4 and 15, retrieved April 18th, 2018, https://www.thomascookgroup.com/wp-content/uploads/2017/09/Thomas-Cook-China_Morgan-Stanley-Investor-Trip_19.09.17_v-FINAL.pdf

[xi] Bill Marriott (2010, December 22nd), Partnering with Ctrip: China’s Largest Online Travel Booking Website , retrieved April 18th, 2018, http://www.blogs.marriott.com/marriott-on-the-move/2010/12/partnering-with-ctrip-chinas-largest-online-travel-booking-website.html

[xii] Hospitalitynet (2012, March 2nd), Ctrip and Marriott International Take Next Step in Global Partnership, retrieved April 17th, 2018, https://www.hospitalitynet.org/news/4055118.html

[xiii] China.com (2017, June 16th), 网曝携程对万豪、洲际等高端酒店排名置底, retrieved April 18th, 2018, http://economy.china.com/jykx/news/11179727/20170616/25073963.html

[xiv] China.com (2017, June 16th), 网曝携程对万豪、洲际等高端酒店排名置底, retrieved April 18th, 2018, http://economy.china.com/jykx/news/11179727/20170616/25073963.html

[xv] Sina Finance (2017, July 18th), 高端酒店与OTA再角力:万豪壮大直销反击佣金上涨, retrieved April 18th, 2018, http://finance.sina.com.cn/roll/2017-07-18/doc-ifyiakwa4302789.shtml

[xvi] Marriott International (2017, August 7th), Alibaba Group and Marriott International Announce Innovative Joint Venture to Redefine Travel Experience, retrieved April 18th, 2018, http://news.marriott.com/2017/08/alibaba-group-marriott-international-announce-innovative-joint-venture-redefine-travel-experience/

[xvii] Marriott International, Marriott Rewards and Ctrip Partnership News, retrieved April 17th, 2018, http://www.marriott.com/marriott-rewards/earn/ctrip-partner.mi

[xviii] Ctrip, retrieved April 2nd, 2018, http://www.ctrip.com/

[xix] Qunar, retrieved April 2nd, 2018, https://www.qunar.com/

[xx] eLong, retrieved April 2nd, 2018, http://www.elong.com/

[xxi] Fliggy, retrieved April 2nd, 2018, http://www.fliggy.com/

[xxii] The Wall Street Journal (2018, January 11th), Marriott Makes China Mad With Geopolitical Faux Pas, retrieved April 18th, 2018, https://www.wsj.com/articles/location-location-chinese-officials-slam-marriotts-designation-of-hong-kong-macau-as-countries-1515663854?mod=searchresults&page=1&pos=10

[xxiii] Marriott International, retrieved April 17th, 2018, http://www.marriott.com.cn/reservation.html

[xxiv] Jing Daily (2016, October 31st), Alibaba’s Alitrip Rebrand Reveals Big Bet on Chinese Millennial Travelers, retrieved April 17th, 2018, https://jingdaily.com/alibaba-abandons-alitrip-brand-and-bets-on-chinese-millennial-travelers-with-new-brand/

[xxv] Reuters (2018, April 3rd), Marriott aims to cut commissions for online agencies: CEO, retrieved April 18th, 2018, https://www.reuters.com/article/us-marriott-intnl-india-onlinetravel/marriott-aims-to-cut-commissions-for-online-agencies-ceo-idUSKCN1HA1U3

Marriott launches a new Chinese online storefront – but still lacks direct booking feature on its own website

Cina Giorno Otto – Shanghai The Bund by Dorli Photography – CC BY-NC-ND 2.0

In a previous blog post, we reviewed how after the January 2018 incident in which Marriott sent out a customer survey listing Taiwan, Tibet, Hong Kong, and Macau as countries separate from China, Marriott complied with a Chinese government request to shut down its Chinese websites and apps. We have also tracked in a separate post the status of Marriott’s Chinese language webpage since the January shutdown.

Marriott’s website directed to a maintenance message on 1/30/18 (archived screenshot via Internet Archive)

Although Marriott’s Chinese website (marriott.com.cn) was restored by March, the restored website did not offer a search bar to search for hotel availability, unlike the original version of the site.

On April 18th, 2018, China Daily reported that the joint-venture formed by Marriott and Alibaba, which will be responsible for Marriott’s Chinese-language website, app, and Fliggy storefront (see our post on the Marriott Alibaba deal), planned to launch an exclusive booking portal online in the following week.[1] One week later, on April 27th, 2018, Marriott announced the redesign of Marriott’s Fliggy storefront, marriottcn.fliggy.com.[2]

Marriott’s Fliggy’s storefront was previously under the address marriott.fliggy.com.[3] A search on the Internet Archive shows that marriott.fliggy.com was offline in the aftermath of the January incident, redirecting visitors to an error page on Taobao.com (Taobao is one of Alibaba’s shopping websites).[4] The relaunch of Marriott’s Fliggy storefront came only a week before Marriott’s annual shareholder meeting on May 4th.[5]

Marriott’s former Fliggy storefront unavailable on 3/16/18 (archived by Wayback Machine)[6]

Marriott’s own Chinese-language website does not have a direct booking feature: Chinese customers visiting the site looking to book a hotel room must click on a ‘reservation’ page, which forwards visitors to Marriott’s smartphone app, Fliggy storefront, and English-language international website.[7]

According to Arne Sorenson, the company is seeking to lower the commissions it pays to online travel agencies, starting with Expedia.[8] Yet Marriott’s official Chinese webpage still does not have its own direct-booking portal. Investors of Marriott might want to ask:

  • As Marriott seeks to cut the commission fees to online agencies, what will happen to its relationship with Alibaba? (We will explore this in our future discussion of the Ctrip partnership.)
  • Does this new Fliggy storefront signal that Alibaba has begun – or is on its way towards – taking over Marriott’s Chinese-language websites and app, as CCO Stephanie Linnartz said would eventually happen? [9]

 

[1] China Daily (2018, April 18th), Marriott, Alibaba to launch new booking portal, retrieved April 30th, 2018, http://www.chinadaily.com.cn/a/201804/18/WS5ad6a8f1a3105cdcf6518fee.html

[2] Marriott Interntional (2018, April 27th), Marriott International Elevates Travel Experience For Chinese Consumers With Enhanced Mobile Functionality And Global Wallet-Free Travel, retrieved April 30th, 2018, http://news.marriott.com/2018/04/marriott-international-elevates-travel-experience-for-chinese-consumers-with-enhanced-mobile-functionality-and-global-wallet-free-travel/

[3] Wayback Machine, August 13th, 2017 Snapshot: marriott.fliggy.com, retrieved April 30th, 2017, https://web.archive.org/web/20170813070528/marriott.fliggy.com/

[4] Wayback Machine, March 16, 2018 Snapshot: marriott.fliggy.com, retrieved April 30th, 2017, https://web.archive.org/web/20180316121612/marriott.fliggy.com/

[5] Annual Meeting, Marriott Investor Relations, retrieved 4/30/18. https://marriott.gcs-web.com/annual-meeting

[6] Wayback Machine, March 16, 2018 Snapshot: marriott.fliggy.com, retrieved April 30th, 2017, https://web.archive.org/web/20180316121612/marriott.fliggy.com/

[7] Marriott International, retrieved April 30th, 2018, http://www.marriott.com.cn/reservation.html

[8] Reuters (2018, April 3rd), Marriott aims to cut commissions for online agencies: CEO, retrieved April 30th, 2018, https://www.reuters.com/article/us-marriott-intnl-india-onlinetravel/marriott-aims-to-cut-commissions-for-online-agencies-ceo-idUSKCN1HA1U3

[9] Reuters (2017, August 7th), Marriott set to woo Chinese tourists with Alibaba deal, retrieved April 17th, 2018, https://www.reuters.com/article/us-marriott-intnl-alibaba/marriott-set-to-woo-chinese-tourists-with-alibaba-deal-idUSKBN1AN1JN

What deal did Marriott make with Alibaba? An Explainer

(East Nanjing Pedestrian Shopping Street by David Leo Veksler – CC BY 2.0)

In August 2017, Marriott International announced a strategic partnership with the Chinese tech giant Alibaba. In its press release, Marriott claimed that the partners would redefine the travel experience for hundreds of millions of Chinese consumers.[1]

Western press mentions of the deal have repeated Marriott’s rosy predictions: for example, stories in the Wall Street Journal and hospitality industry outlet Skift only quoted Marriott and Alibaba executives.[2] [3] In this post, we break down what Alibaba is, and explain the components of the deal.

What is Alibaba?

 Alibaba, sometime referred to as the “Amazon of China,” is a Chinese tech conglomerate known for its online retail business.[4] [5] Fliggy, previously known as Alitrip, is Alibaba’s online travel platform. Fliggy was Alibaba’s third attempt to break into the Chinese online travel market.[6] The e-commerce giant’s other holdings included the Youtube-like Youkou, the South China Morning Post, one of Hong Kong’s most influential English language newspapers, and a major investment in social media service Sina Weibo, often referred to as the Twitter of China. [7] [8] [9]

The company also created the payment system Alipay in 2004, which was later spun-off into a separate entity named Ant Financial.[10] [11] Jack Ma, the founder of Alibaba, held 46% of Ant Financial and had voting rights on its board.[12] [13]

Joint Venture to Manage Marriott’s Chinese Web Presence

The Marriott and Alibaba deal created a joint venture responsible for operating Marriott’s flagship store on Fliggy.[14] Alibaba will eventually run Marriott’s Chinese-language websites and apps, according to Marriott’s Chief Commercial Officer.[15] As part of the deal, Marriott and Fliggy also launched a promotional shared reward program.[16]

This is not the first time that Marriott has established a shared reward program with a major OTA company in China. In 2012, Marriott announced a joint reward program with Ctrip, the largest Chinese OTA platform; the program expired in November 2017, three months after the Marriott-Alibaba deal.[17] [18] [19] The story of Marriott’s partnership with Ctrip, and its dissolution, will be discussed in a future blog post.

In January 2018, Marriott shut down its Chinese language websites on the order of government authorities after a survey listed Hong Kong, Taiwan, Tibet and Macau as countries separate from China.[20] (See our post explaining the fallout from this incident.) The survey had been prepared by a vendor from Canada.[21] As of April 16, 2018, Marriott’s Chinese-language webpage still doesn’t have a direct-booking feature; the webpage instead redirects visitors to other booking systems such as Marriott’s Chinese language smartphone app or its international website in English.[22]

Marriott announced that the joint venture would put an exclusive booking portal online the week of April 23rd, 2018.[23]

Marriott Hotels to Accept Alipay

A key piece of the deal is the roll-out of mobile payment system Alipay in select Marriott Hotels in the Asia-Pacific region. Marriott began accepting payment via Alipay in September 2015 at a small number of hotels in China.[24] Following the deal, Marriott has expanded acceptance of Alipay to more hotels across Asia.[25]

In January 2018, Alipay’s parent company Ant Financial issued an apology after it came under criticism within China for how it handled users’ data.[26] The controversy within China arose in January 2018 after users said they felt misled into allowing its Alipay service to share data on their spending habits with Ant’s credit-scoring arm and other third-party services.[27] A future post will cover this and other public incidents related to Alibaba’s handling of user data.

Alipay’s largest competitor is WeChat Pay, owned by the tech giant Tencent.[28]

Is the Alibaba deal an unqualified boon for Marriott?

Despite the laudatory press coverage, questions remain about the value of this deal to Marriott.

  • Why did Marriott decide to forgo its shared reward program with Ctrip for Fliggy?
  • How will Alipay’s customer trust controversy affect Marriott?
  • How will the Marriott-Alibaba relationship evolve, given Marriott’s dependence on its joint-venture with its OTA partner Fliggy for its Chinese web-presence?

 

[1] Marriott International (2017, August 7th), Alibaba Group and Marriott International Announce Innovative Joint Venture to Redefine Travel Experience, retrieved April 17th, 2018, http://news.marriott.com/2017/08/alibaba-group-marriott-international-announce-innovative-joint-venture-redefine-travel-experience/

[2] The Wall Street Journal (2017, August 7th), Alibaba, Marriott Team Up to Serve Chinese Tourists Abroad, retrieved April 17th, 2018, https://www.wsj.com/articles/alibaba-marriott-team-up-to-serve-chinese-tourists-abroad-1502103604?mod=searchresults&page=1&pos=3

[3] Skift (2017, August 7th), Marriott Partners With Alibaba to Court the Chinese Travel Market Even More, retrieved April 17th, 2018, https://skift.com/2017/08/07/marriott-partners-with-alibaba-to-court-the-chinese-travel-market-even-more/

[4] China Daily (2016, April 6th), Alibaba becomes the world’s largest retailer, retrieved April 17th, 2018, http://www.chinadaily.com.cn/business/tech/2016-04/06/content_24315726.htm

[5] The Sydney Morning Herald (2017, August 27th), ‘Amazon of China’ Alibaba already has supermarkets. Now it wants our food, retrieved April 17th, 2018, http://www.smh.com.au/business/retail/alibaba-already-has-supermarkets-now-it-wants-our-food-20170825-gy4aqf.html

[6] Jing Daily (2016, October 31st), Alibaba’s Alitrip Rebrand Reveals Big Bet on Chinese Millennial Travelers, retrieved April 17th, 2018, https://jingdaily.com/alibaba-abandons-alitrip-brand-and-bets-on-chinese-millennial-travelers-with-new-brand/

[7] TechCrunch (2018, April 19th), Report: Smartphone usage set to overtake time spent watching TV in China, retrieved April 24th, 2018, https://techcrunch.com/2018/04/19/report-smartphone-usage-set-to-overtake-time-spent-watching-tv-in-china/

[8] TechCrunch (2016, April 6th), Alibaba completes SCMP acquisition and removes the paper’s online paywall, retrieved April 24th, 2018, https://techcrunch.com/2016/04/05/alibaba-completes-scmp-acquisition-and-removes-the-papers-online-paywall/

[9] The New York Time (2013, April 29th), Alibaba pushes into social networking with Weibo investment, retrieved April 24th, 2018, https://www.reuters.com/article/net-us-sinaweibo-alibaba-stake/alibaba-pushes-into-social-networking-with-weibo-investment-idUSBRE93S0DA20130429

[10] Quartz (2014, June 16th), Alibaba has a new way of explaining its controversial Alipay spinoff, retrieved April 17th, 2018, https://qz.com/221635/alibaba-has-a-new-way-of-explaining-its-controversial-alipay-spinoff/

[11] Nikkei Asian Review (2018, February 8th), Alibaba to buy 33% of spinoff Ant Financial, retrieved April 17th, 2018, https://asia.nikkei.com/Business/AC/Alibaba-to-buy-33-of-spinoff-Ant-Financial

[12] Quartz (2014, June 16th), Alibaba has a new way of explaining its controversial Alipay spinoff, retrieved April 17th, 2018, https://qz.com/221635/alibaba-has-a-new-way-of-explaining-its-controversial-alipay-spinoff/

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