It’s over: eLong and Tongcheng end partnership after just 40 days
eLong says Tongcheng (the company which runs LY.com) has agreed to pay eLong $4.8 million in exchange for termination of the “strategic cooperation agreement”. The amount was paid yesterday.
The company adds:
“The parties have also agreed that any future commercial cooperation will be negotiated at a later date.”
In April this year, eLong and Tongcheng entered into a partnership that enabled eLong to become the exclusive supplier of agency hotel and group-buying hotel inventory for Tongcheng in mainland China, and Tongcheng to be the exclusive supplier of scenic attraction ticket inventory for eLong.
There was a rumor that Tencent (the common investor of eLong and Tongcheng) could be the trigger for this partnership, in an effort to compete against the speculated threat of a Ctrip-Qunar merger.
A week after the partnership was announced, Ctrip, the country’s largest OTA, invested over $200 million in competitor LY.com, a move which generally surprised the wider market. With the investment, Ctrip also became the second biggest stakeholder in LY.
But for now at least, the alliance between eLong and Tongcheng is broken.
The trigger for this could be Ctrip’s investment in LY and its interest to provide hotel inventory for LY, according to a source.
We have contaced Ctrip and eLong to get more information on this development.
NB: End image via Shutterstock.
Karthick was general manager for Tnooz in Asia until September 2014.