China wields a steadier blade over tech giants

Tongcheng Travel Holdings

15/01/2026 12:00

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Robyn Mak

HONG KONG, Jan 15 (Reuters Breakingviews) - China's market watchdogs have a new target: online travel agent Trip.com 9961.HK. Following investigations into Alibaba  9988.HK and Meituan 3690.HK five years ago that shook investor faith in the country's tech sector, the State Administration for Market Regulation on Wednesday announcedit is probing the New York- and Hong Kong-listed firm led by Jane Sun for monopolistic behaviour, erasing some $8 billion, or 17%, from its market capitalisation.

Trip.com saysit will co-operate with authorities, but it is a vulnerable target. The company's acquisitions over the past decade, including the purchase of a stake in peer Tongcheng Travel 0780.HK, have cemented its dominance. Analysts at Bank of Communications International estimated Trip.com had a 56% share of the country's online travel bookings in 2024, per local media .

 Thanks to a post-pandemic boom in domestic travel, its top line, which also includes international sales, is forecast to jump 14% this year, to 71 billion yuan ($10.1 billion), according to estimates gathered by Visible Alpha. Impressively, its gross profit margin is expected to remain at 80% for the next five years, up from 72% a decade ago.

That level of pricing power has attracted the ire of both hotel and tourism groups plus other regulators, which are already scrutinising the sector amid intensifying competition between the market leader and rivals Alibaba, Meituan and JD.com 9618.HK. As recently as last month, for example, the Yunnan Provincial Tourism Homestay Industry Association called out Trip.com and peers for forcing mom-and-pop businesses to choose one online agency, as well as for raising commission rates and setting unfair conditions, among other complaints. In the second half of last year, provincial antitrust regulators summoned Trip.com at least four times, local media reported.

An antitrust fine of up to 10% of domestic sales looms. Analysts at Citi reckon that translates to a maximum 4.9 billion yuan, roughly $700 million, hit – or 23% of Trip.com's forecast 2026 net profit, per Visible Alpha estimates. The bigger risk will be whether officials will tolerate the company's outsized profits at a time when Beijing is trying to spur consumption in the $19 trillion economy. Trip.com's fortunes are also a sharp contrast to those of struggling hoteliers and state-owned airlines.

Investors can at least take comfort that, unlike with Alibaba, the crackdown on Trip.com does not appear to be driven by Sun or its founders falling out of grace with Beijing. In some ways, that makes China's antitrust regime more predictable.

Follow Robyn Mak on X.

CONTEXT NEWS

China's State Administration for Market Regulation on January 14 said it has launched an investigation into online travel company Trip.com over alleged monopolistic practices. The company's New York shares closed down 17% to $62.78 on the day.

Trip.com said in a statement that it was "actively" co-operating with the investigation and would "fully implement regulatory requirements".

Trip.com shares are up on China's post-pandemic travel boom https://www.reuters.com/graphics/BRV-BRV/egvbbwqnkvq/chart.png

(Editing by Una Galani; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on MAK/ robyn.mak@thomsonreuters.com))