Chapter 670: OTA War, Traffic Ban! Since Liang Zhangjian Is Courting Death, Let's Grant His Wish

On Teachers’ Day, Ctrip, in collaboration with Elong and Qunar, launched an attack on Kuai Pao Liquor Travel. Meanwhile, Tuniu and Tongcheng chose to watch from the sidelines, not daring to get involved, fearing they would be added to Senlian Capital’s hit list.

Liang Zhangjian’s provocative tactic of poaching talent with high salaries left his peers secretly dumbfounded, all marveling at his audacity.

After all, Qian Du Network had just been defeated. Over three months, it had burned through more than three billion in funds yet failed to even secure a twenty-percent market share.

Now, under Kuai Pao’s counterattack, its market share was shrinking even further.

Who could guarantee that Ctrip wouldn’t become the next Qian Du?

According to statistical data from iResearch Consulting, the market landscape for Hua Country’s online travel agencies (OTAs) in 2013 was as follows: Ctrip held 36.1%, Kuai Pao had 29.4%, Tongcheng had 11.6%, Tuniu had 7.3%, Qunar had 6.2%, and Elong had 4.9%.

From this, it was clear that the current situation was the number one player teaming up with the fifth and sixth to take on number two, while numbers three and four watched from the sidelines.

The reason Liang Zhangjian launched this fierce counterattack was simply that Kuai Pao Liquor Travel’s market share was about to surpass 30%, threatening Ctrip’s position as the industry leader.

He was primarily targeting the key ground-promotion personnel at or above the regional manager level, members of the supply chain management team, and core personnel in product and technology positions at Kuai Pao Liquor Travel.

For example, if a mid-level manager at Kuai Pao had an original annual salary of 400,000, Ctrip would offer 800,000 to 900,000.

Of course, this was a package deal including salary and stocks.

For grassroots ground-promotion staff, the base salary was doubled, with a promised 50% increase in KPI bonuses.

As for the developers of Kuai Pao Liquor Travel’s automated system, they were given generous offers of a doubled salary plus a signing bonus of 100,000 or 200,000.

It had to be said, this move was highly effective. Not many people could resist the temptation of a doubled salary.

That afternoon, Ctrip poached more than half of Kuai Pao Liquor Travel’s team in the Jinling Region, affecting over ten people from managers down to team members.

Even though it meant resigning on short notice, forfeiting their N+1 severance package, losing a batch of unvested stock options, and being subject to a non-compete agreement, these people were dead set on leaving.

This was because Ctrip was willing to cover all their compensation losses and even proposed a plan to exchange their Kuai Pao stock options for Ctrip stock.

After all, Ctrip had gone public ten years ago. Once employees received the stock and got through the lock-up period, they could cash out. The liquidity was undoubtedly much better.

But Kuai Pao showed no signs of even going public!

Pei Yi sneered when he received the news.

He was always the one on the offensive. This was the first time he’d been besieged. Although it felt a bit strange, he wasn’t the least bit intimidated.

He knew very well that the travel and hospitality industry was a low-frequency consumption sector, whereas Kuai Pao commanded three high-frequency consumption scenarios: food delivery, Group Buy, and grocery shopping.

He was convinced there was no way he could lose by using high-frequency services to compete against a low-frequency one.

But Ctrip’s tactics were indeed disgusting. If he gave the employees of Kuai Pao Liquor Travel a raise, other departments would definitely be unhappy. Yet if he ignored the problem, the turnover rate in the travel division would skyrocket.

Even offering the same salary as Ctrip would be useless. What if they offered triple?

Was he supposed to keep matching their raises indefinitely?

After a moment of thought, Pei Yi summoned Zhang Xuhao, Shan Jiawei, and Liang Changlin to discuss countermeasures. Kou Zhen, who was in charge of ground promotion for food delivery, and Kang Jia, who handled ground promotion for Group Buy, also entered the conference room.

“President Pei, I suggest we initiate arbitration against the employees who violated their non-compete agreements. We have to let these people know that Ctrip’s double salary isn’t so easy to take.”

Shan Jiawei said in a cold voice.

He came from Ah Li’s Huagong Iron Army and had already accumulated extensive and mature experience in handling such situations.

Even though Ctrip might try to evade responsibility by having employees join under aliases or signing labor contracts with other companies, the necessary legal proceedings couldn’t be skipped.

Otherwise, everyone would think Kuai Pao was a pushover. Even Tuniu and Tongcheng, who were hoping to profit from the conflict, might seize the opportunity to take a bite.

Pei Yi nodded after hearing this. He knew this action wouldn’t be very effective in practice, but he agreed anyway. Then he spoke, “I’ve called you all here for three things.”

“First, we’re adjusting the organizational structure. We will merge the ground promotion teams for the travel and hospitality business and the food service business under a single management. This will reduce the efficiency of Ctrip’s targeted poaching. We will also transfer elites from other departments to temporarily fill the vacancies in the travel business.”

At this point, Pei Yi looked at Kou Zhen and Kang Jia and ordered in a solemn tone, “Kou Zhen will serve as the General Manager of the ground promotion team, and Kang Jia will be promoted to Deputy General Manager. The two of you will forge this ground promotion ‘iron army’ into a single force and crush Ctrip for me!”

Upon hearing this, Kou Zhen’s face lit up with joy, and he quickly replied, “Yes, President Pei!”

“No problem, President Pei,” Kang Jia chimed in.

In terms of experience and qualifications, he couldn’t compare to Kou Zhen, so losing out to him was understandable.

Besides, Deputy General Manager was still a promotion from his previous Director position. Although he felt a little resentful, he could only accept it calmly.

“Second, in the first quarter of next year, the company will grant the Liquor Travel Division an additional stock option bonus worth 100 million US Dollars. It will vest over four years, and the options will be forfeited immediately upon an employee’s resignation.”

“Third, we will launch a five-year loyalty plan: employees with five years of service can redeem stock options equivalent to 50% of their annual salary in value.”

Pei Yi slowly announced these two decisions.

No salary increases, only stock options.

After saying this, he added, “Employees who leave Kuai Pao to jump ship to Ctrip are banned from returning for 60 years. It doesn’t matter who pleads on their behalf.”

In reality, although Kuai Pao had non-compete agreements, it had never enforced them. But at this critical juncture, if anyone dared to cooperate with Ctrip and disrupt the company’s expansion, they couldn’t expect him to show any mercy.

Zhang Xuhao, Shan Jiawei, and Liang Changlin immediately acknowledged the orders.

“Starting tomorrow, you will personally lead the team. Within three months, I want you to sign up 100,000 mid-range, low-star, and economy hotels. Ctrip’s hotel commission is 15%; I’ll give you the authority to go as low as 8%. For high-star hotels, the commission can be as low as 5%.”

“Also, tell our contacts at the hotel chains: either they delist Ctrip’s room inventory, or they terminate their partnership with Kuai Pao.”

Pei Yi said, looking at Kou Zhen.

Forcing merchants to choose one of two options, while ruthless, was always the most effective tactic in business warfare.

Don’t be fooled by Kuai Pao Liquor Travel’s market share being smaller than Ctrip’s; Kuai Pao’s O2O ecosystem was far more complete.

When a user opens Gaode Map and searches for a hotel, it automatically recommends Kuai Pao’s travel and hospitality Group Buy packages.

When users use Fast Taxi, after reaching their destination, the successful payment screen will also typically recommend nearby restaurants and hotels.

What did Ctrip have to compete with Kuai Pao?

Relying on just poaching and price wars gave them no chance of victory!

Poaching talent ultimately has costs. Once next month’s human resources cost data came out, Liang Zhangjian would probably have a major headache.

“Okay, I understand,” Kou Zhen replied.

Next, Pei Yi laid out a comprehensive deployment of his strategy.

First, attack Ctrip’s weak points. Their coverage of low-star hotels was less than 30%, and their coverage in third- and fourth-tier cities was only 60%. This was Kuai Pao’s opportunity.

Second, elevate the hotel portal to a top-level page, accessible by swiping right or clicking the channel resource slot.

Then, launch the “Auto Order Acceptance” and “Hotel Reservation” systems to improve the experience on both the merchant and user ends from a technical standpoint.

Finally, leverage their advantage in the search domain to lower the search weight of Ctrip, Elong, and Qunar.

For example, when a user searches for hotels in Hu City, the information for these three companies would be ranked on the third or even fifth page of the search results.

This would cut off the source of traffic for sites like Ctrip right at the upstream.

At the same time, he had negative news about Ctrip, Elong, and Qunar dug up. Issues like “review padding,” “poor service quality,” and “misleading product descriptions” were pushed on Xiaohongshu, Mimo, and Toutiao, with the goal of creating a “dirty, messy, and bad” impression in users’ minds.

On the very day the iPhone 5s was released, Kuai Pao also launched its one-versus-three OTA war.

Early the next morning, Kang Jia led a team of over twenty people and rushed to Jinling to take over the local travel and hospitality business.

As for the dozen or so Kuai Pao employees who were preparing to jump ship, Kang Jia had them line up next to the restrooms that very day to wait for their handover work.

He wouldn’t let them go immediately. He would drag it out for at least a week to drive up Ctrip’s poaching costs.

At 10 a.m., Kuai Pao launched a 30-yuan discount for new customers on their first order and a consecutive-stay discount policy to attract price-sensitive users.

After receiving the latest commission bonus policy, ground promotion staff in first-, second-, third-, and fourth-tier cities quickly ate a bite of breakfast before heading straight for nearby hotels to talk to the owners about “exclusive agreements” or partnership deals.

Meanwhile, Liang Zhangjian quickly sensed that something was wrong. Ctrip’s organic traffic had dropped by 17.1%, which was definitely not normal.

He had the data department investigate immediately!

In less than ten minutes, he received a reply: Lingxi Browser had delisted Ctrip from its web directory, and when using Lingxi Search, one usually had to flip through five or six pages to find a link to Ctrip’s offerings.

“That bastard Pei Yi is truly shameless.”

Liang Zhangjian cursed viciously, his eyes narrowed.

But he seemed to have forgotten that his own act of frantically poaching Kuai Pao Liquor Travel personnel with double salaries was just as shameless.

This move from Pei Yi had struck Ctrip right where it hurt.

Looking at Ctrip’s business, 80% of its orders came from search pages. Search ranking was its traffic lifeblood, and search engines were a major source of that search traffic.

Lingxi Search had a market share as high as 25%. Once it cut off Ctrip’s traffic, Liang Zhangjian was already finding it hard to cope.

However, he already had a countermeasure prepared. He immediately instructed his assistant, “Book a flight for me. I need to make a trip to Yanjing.”

If Lingxi Search could block Ctrip, then Qian Du Search could naturally block Kuai Pao.

He and Li Yanhong had a common competitor, so it was perfectly logical for them to join forces.

A month ago, Ctrip had already started negotiations with Qian Du, planning to reach a strategic partnership through a stock swap.

He had been a bit hesitant before, but now he no longer wavered.

「At the same time.」

After hearing the news while on vacation in Northern Europe, Chen Yansen pondered for a few seconds before calling Zhou Hongyi.

“Block Ctrip? President Chen, they’re a major client for 360’s advertising business.” Zhou Hongyi looked troubled.

“I will make up for 360’s lost advertising revenue with Kuai Pao’s advertising partnership,” Chen Yansen said calmly.

“That Ctrip really deserves to die! President Chen, the advertising matter isn’t urgent. I’ll immediately instruct the head of our search business to downgrade Ctrip’s ranking.”

Zhou Hongyi’s change in attitude was as fast as flipping through a book.

“President Zhou, thanks,” Chen Yansen replied with a smile.

After hanging up, he made separate calls to Ma Wenteng and Zhang Chaoyang.

In less than fifteen minutes, Chen Yansen had handled every search engine except Qian Du. Starting tomorrow, Ctrip would lose half of its search traffic in both the PC and mobile domains.

Since Liang Zhangjian was in such a hurry to court death, he might as well grant him his wish!