Ctrip’s CFO: “The language barrier may be our biggest challenge at the moment”

An interview with Ctrip’s CFO Cindy Xiaofan Wang

Here is this week’s Turbulence interview. This time, we had the pleasure to interview Ctrip’s CFO Cindy Xiaofan Wang. As China’s leading travel service enterprise (currently, employing more than 16,000 people), Ctrip provides over 90 million registered members with comprehensive services including hotel reservations, flight ticketing, package tours, corporate travel management, train ticket and dining reservations.

About the interviewee: Cindy Xiaofan Wang has served as Ctrip’s Chief Financial Officer since November 2013 and Executive Vice President since May 2016. She served from 2000 to 2001 as finance manager in China eLabs, a venture capital firm, and previously, she worked with PricewaterhouseCoopers Zhong Tian CPAs Limited Company. Ms. Wang joined Ctrip in 2001 and has held a number of managerial positions in the company. She served as Vice President since January 2008, until she became CFO in 2013.

Arturo: Ctrip seems to be doing a hybrid, online travel agency/tour operator model. What would you say are the main pillars of Ctrip’s business model and how does it differ from other competitors?

Cindy: Ctrip has four major business pillars: accommodation, transportation, packaged tour and corporate travel. Except for corporate travel, the other three are operated with a hybrid model of OTA and open platform.

Both our best-in-class service and our one-stop shopping platform are the major differences between us and our competitors. Regarding the first one, we provide 24/7 customer service with rapid response times. We support automatic and intelligent after-sales customer services as well as real-time time inventory management and supplier relationships. And we also have a 24/7 international SOS system and a Natural Disaster Relief Fund.

Regarding our one-stop shopping platform, as you can see in the picture below (the front page of our mobile app), we have covered almost all travel related products and services. Thanks to the platform we’ve enhanced customer loyalty and stickiness while targeting a more personalized cross-selling.

How are your processes keeping up with the fast growth and how do you and your finance team contribute to it?

Ctrip has a decentralized structure to give autonomy to all the business units and each of them has its own management team (CEO, CFO and COO) and financial statements.

Although this means that they make their independent decisions, it is thanks to the joint force of all the business units that we have seen the fast growth of Ctrip Group.

In this regard, the finance team has been actively and deeply involved in daily operations and provides financial advice and analysis to assist the decision-making of management teams.

How has Ctrip changed during your time at the company?

I joined Ctrip in 2001 and there have definitely been many changes over the past 16 years. For instance, the most important booking channel has switched from offline to PC, and eventually to mobile. Or in terms of products, we have expanded our product lines from just hotel booking and air ticketing to around 20 businesses that have pretty much covered all the major sub-segments in travel. And of course, in terms of geographical coverage, we have expanded from mainland China to all over the world.

And what have been your main challenges?

In the near term, we will focus on the strong execution of our teams’ ability to reach our strategic goals. Over the longer term, the biggest challenges for Ctrip are to attract the best talent in the Internet space and to maintain strong execution in a fast expanding organisation.

To give you a concrete example, we invested in Skyscanner last year and we started to consolidate the company’s financials from Q1 2017. Therefore, it requires our finance team to have good English communication skills with their counterparts in Skyscanner. We still need to enhance the English proficiency of our finance colleagues.

What are the priorities for your business and how is the finance function helping to achieve them?

The current priority for our business is to gain more market share in both China and overseas markets. The finance function has helped to make forecasts, develop business plans and analyze business performances. On the corporate level, the finance team is helping the management team to set up policies and rules to manage and coordinate the relationships among all business units. Moreover, in each business unit (if you look at the front page of our above-shown mobile app, almost each cubic represents a different business unit), the finance team is a strategic partner of the unit’s CEO.

Often we have the impression that China is very technologically innovative. For finance leaders around the world, it would be interesting to hear which key areas you have employed technology to Ctrip’s advantage.

We have deployed OA (Office Automation) systems in the finance department to improve the efficiency and accuracy of the group’s budgeting, financial consolidation and analysis. It has also saved our effort of managing day-to-day finances, while also offering a clear, comprehensive view of our business’ economic status. And we’re also in the first batch of companies in China to introduce electronic invoice system to serve our customers.

At the moment, Ctrip’s biggest brand recognition is in China and Asia, but you are growing your global presence. So, what are the main challenges and implications of this internationalisation for your finance department?

Ctrip’s internationalization requires our finance team to have both good English communication skill and solid financial knowledge across different regions. The language barrier may be the biggest challenge for us now as we need to have more communication with overseas subsidiaries. We aim to hire more bilingual international talent in the near future.

You have made some major acquisitions such as Skyscanner. Was it difficult to integrate their teams inside your company?

For overseas investment companies, we prefer to give them autonomy, letting them run the business by themselves.

But is there any knowledge/expertise/tech-related know-how exchanged between both companies?

There’s definitely knowledge and expertise sharing between Ctrip and Skyscanner. Both companies will be able to harness insights into the markets they intend to expand into. Skyscanner provides its travel search services in over 30 languages. It has an established leadership in Europe and an increasingly strong presence in APAC and the Americas. It has created a global product that combines global coverage with local partnerships, product-market-fit and localization. It has 800 staff across 10 offices in EMEA, APAC and the US. Therefore, the investment will accelerate Ctrip’s international expansion. Ctrip will leverage our experience, technology and booking capabilities to enhance Skyscanner’s execution. Skyscanner will gain access to Ctrip’s flights GDS as well as their considerable hotels inventory. Skyscanner is currently a meta-search platform that is led by its flight search capabilities, with a growing nascent hotel and car rental business. Ctrip can help Skyscanner improve its cross-selling capabilities to drive its growth as a true travel search provider.

What is China’s role as a source market and as a destination for the travel industry of the future and what part will Ctrip play in this?

China’s travel market is a very promising industry with great long-term growth potential. Last year, the number of Chinese travellers going abroad reached 122 million and the number is expected to reach to 200 million by 2020, according to the government. For Ctrip, helping more Chinese people explore the world will remain our focus in the coming years. Besides, we have brought and will continue to bring our unique one-stop travel services to greater China and foreign markets through partnerships with local and international players.