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Signage on the Journey.com Group Ltd. headquarters constructing in Shanghai, China, on Monday, Aug. 28, 2023.
Bloomberg | Bloomberg | Getty Pictures
Shares of Chinese language on-line journey companies supplier Journey.com plunged 19.23% in Hong Kong on Thursday after Beijing opened an antitrust probe into the corporate, making it the worst performer within the Grasp Seng index.
The autumn additionally marks the inventory’s worst day in Hong Kong because it was listed in April 2021. Shares had closed 17% decrease on Wednesday in New York.
China’s State Administration for Market Regulation late Wednesday mentioned it was investigating Journey.com on account of “suspected abuse of its dominant market place and monopolistic practices,” in accordance with a CNBC translation of the assertion in Mandarin.
Journey.com is the most important on-line journey supplier in Asia by market cap, and one of many greatest globally. The corporate has stakes in UK flight aggregator Skyscanner, Indian journey firm MakeMyTrip, in addition to a number of Chinese language journey suppliers.
Journey.com mentioned in a press release it could “actively cooperate” with the investigation, and added its enterprise operations have been functioning as ordinary.
The case might have long run ramifications for the corporate, in accordance with Morningstar senior fairness analyst Kai Wang.
Wang mentioned that “a number of native tourism associations have complained that Journey.com is committing the identical violations as the opposite two platforms, the place it’s forcing native retailers to signal unique agreements with the platform.” Journey.com will then enhance commissions from the retailers after these agreements are signed.
Citing earlier high-profile antitrust circumstances involving Alibaba and Meituan, in addition to previous authorities warnings, Wang mentioned that Journey.com might incur a “hefty effective.”
SAMR investigated Chinese language tech large in Alibaba in 2021, fining the agency a report 18.2 billion yuan ($2.8 billion) after it was discovered responsible of monopolistic practices.
“This isn’t the primary time Journey.com has run afoul with the federal government for shopper violations, as the corporate was fined for pressured bundling of value-added companies again in 2017. This might additionally infuriate the federal government much more given its repeat offender standing,” he added.
The probe into Journey.com comes as Chinese language tourism is predicted to surge this yr, with journey advertising and marketing and expertise agency China Buying and selling Desk estimating that mainland Chinese language vacationers are anticipated to take about 165 million to 175 million cross-border journeys in 2026, up from an estimated 155 million final yr.
The Chinese language New 12 months vacation, which sees a whole lot of tens of millions of individuals journey again to their hometowns, might be noticed between Feb. 15 and Feb. 23.
Journey consultancy agency Dragon Path Worldwide mentioned that in 2025, 501 million Chinese language traveled domestically throughout the Chinese language New 12 months vacation interval, a 5.9% year-on-year enhance. Tourism spending throughout the interval reached 6.77 billion yuan, a 7% enhance.
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