Ctrip CEO Liang Jianzhang on Traditional Enterprises' Internet Turnaround – Speech Transcript

On November 22‑23, 2014, the 14th China MBA Development Forum and Peking University Guanghua MBA 20th Anniversary were held at Peking University Qiu De Ba Gymnasium, featuring a sub‑forum titled “Traditional Enterprises' Internet Turnaround” where Ctrip founder and CEO Liang Jianzhang delivered a keynote.

Liang began by questioning whether traditional enterprises are being overtaken by the internet or are overturning it, using Ctrip as a case study to discuss past and future internet and mobile strategies.

He highlighted the tourism industry’s strong growth, noting that service‑oriented tourism has grown at double‑digit rates and will continue to expand, especially in high‑end outbound travel, positioning China to become the world’s largest tourism market.

Liang explained that although China’s tourism market is still only one‑third the size of the U.S. market, rapid internet adoption—particularly mobile—has transformed Ctrip from a phone‑based service to a mobile‑dominant platform, with mobile transactions now exceeding 50% of total sales.

He described the core principles of internet economics: information transparency, low information‑acquisition costs, and rapid feedback, which create a highly efficient market that discourages monopolies and encourages continual innovation.

Liang argued that large companies must maintain relentless innovation to stay competitive, as new technologies and agile startups can quickly disrupt established players, especially with the low cost of cloud services and big‑data tools.

He discussed the limitations of monopoly advantages in the internet era, emphasizing scale economies where marginal costs are low, but also warning that size can hinder speed and flexibility.

Liang recounted Ctrip’s early innovations—such as direct payment to hotels and airlines and a sophisticated call center—that gave it a first‑mover advantage and rapid profitability, leading to its 2003 IPO.

He noted that after 2006‑2007, complacency set in, and smaller competitors began to erode Ctrip’s market share through price wars and platform innovations, culminating in a performance slump around 2012 that prompted the board to ask him to return and lead a turnaround.

Liang identified the challenges large firms face in innovating: risk aversion, centralized decision‑making, and slower product development cycles, contrasting these with the agility of smaller firms.

To restore agility, he reorganized Ctrip into multiple semi‑autonomous business units, each with its own decision‑making authority, while retaining shared services such as branding to balance efficiency and flexibility.

He introduced incentive mechanisms resembling startup equity to motivate teams, and emphasized the need for a high‑intensity work culture to sustain rapid product releases.

Following the restructuring, Ctrip launched a suite of new services—including vacation rentals, train tickets, car tickets, specialty tourism, student travel, golf packages, community guides, and on‑site services—leveraging mobile internet to regain market leadership.

Liang reported that Ctrip’s growth rate rebounded from the low‑20% range to the mid‑40% range, and he projected that with continued innovation and China’s expanding tourism market, Ctrip could become a world‑leading travel company over the next decade.