Key Takeaways:
China's market regulator summoned seven online travel platforms including Trip.com and Meituan to address irregular train ticket sales practices, threatening revenue from paid add-on services that have become a key monetization tool for the sector.
China's State Administration for Market Regulation, together with the Cyberspace Administration of China and the National Railway Administration, held regulatory talks with seven third-party platform operators over improper business practices, the SAMR said Wednesday. The platforms summoned include Trip.com (09961.HK), Tongchengtravel (00780.HK), Qunar, Fliggy, Meituan-W (03690.HK) and Gao Tie Guan Jia.
"The relevant enterprises were required to strictly comply with laws and regulations including the Anti-Unfair Competition Law, the Law on the Protection of Consumer Rights and Interests, the E-commerce Law and the Personal Information Protection Law," the SAMR said in a statement. The regulator instructed the platforms to fulfill their primary responsibilities and comprehensively standardize train ticket sales operations.
The authorities targeted several specific practices: improper promotion of "waitlist ticket grabbing assistance" and paid seat selection services, improper inducement of users to buy longer-distance tickets while traveling shorter segments or vice versa, and improper collection and use of users' personal information. The SAMR said it would step up enforcement efforts and handle any suspected illegal activities seriously in accordance with the law.
The crackdown threatens lucrative add-on services that platforms have layered onto railway ticketing, a high-volume but low-margin business that serves as a customer acquisition channel for higher-value products such as hotels and flight bookings. Trip.com shares fell 2.5 percent, Tongchengtravel dropped 1.4 percent and Meituan declined 1.1 percent on the news, with short-selling activity elevated across all three names. Trip.com saw short selling of HK$112.3 million, representing 18.4 percent of turnover, while Meituan's short selling reached HK$734.5 million, or 26.8 percent of trading volume.
The regulatory action follows a broader pattern of Chinese authorities tightening oversight of internet platform companies after a years-long campaign that reshaped the country's technology sector. The SAMR has previously targeted anti-competitive practices in e-commerce, food delivery and ride-hailing, imposing fines and forcing changes to business models. The current action extends that scrutiny to online travel, a sector that had largely escaped the most intense regulatory pressure.
For the affected platforms, the financial impact will depend on how much revenue they derive from railway ticketing add-ons. Trip.com, China's largest online travel agency, generates the bulk of its revenue from accommodation and transportation ticketing, though railway tickets carry lower margins than flight bookings. Meituan's ticketing business is a smaller component of its broader local services empire, which includes food delivery, hotel bookings and in-store services. The companies have not yet disclosed the revenue contribution from the specific practices targeted by the regulator.
The SAMR did not specify a timeline for compliance or indicate whether fines would follow. The regulator said it would monitor the platforms' rectification efforts and take further action if necessary.
This article is for informational purposes only and does not constitute investment advice.
