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Why LY.com's Business Model is so successful?

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LY.com’s Company Overview


LY.com, also known as Tongcheng Network, is a leading online travel service provider based in China. The company is committed to offering comprehensive travel services, including flight tickets, hotel bookings, vacation packages, and train tickets to millions of users across the globe. With a strong focus on innovation, LY.com leverages advanced technology to provide personalized and efficient travel solutions, aiming to make travel planning more convenient and affordable for its customers. The company has a vast network of travel industry partners, enabling it to offer a wide range of options and competitive prices.

Regarding the business model, LY.com operates as an online intermediary platform that connects travelers with various service providers in the travel industry. The company primarily makes money by charging commission fees from these service providers for every booking made through its platform. This model allows LY.com to maintain a large inventory of travel services without owning any physical assets, resulting in lower operational costs and higher scalability.

The revenue model of LY.com is primarily based on the commission and service fees it charges from its partners. For every transaction made on the platform, whether it's a flight ticket, hotel booking, or vacation package, the company earns a percentage of the total booking amount as commission. In addition, LY.com also generates revenue from advertising. Various travel-related businesses pay to advertise their services on LY.com's platform, thereby creating an additional income stream for the company. This dual revenue model enables LY.com to maximize its earnings while providing its users a wide range of options.

https://www.ly.com/

Headquater: Guangzhou, Guangdong, China

Foundations date: 2004

Company Type: Private

Sector: Consumer Services

Category: Travel

Digital Maturity: Digirati


LY.com’s Related Competitors



LY.com’s Business Model Canvas


LY.com’s Key Partners
  • Baidu
  • TNOOZ
  • Elong
  • Tencent
  • More than 5.000 travel agencies in China and overseas
  • Travel agencies community
  • Investors (Dianping, Ctrip, The Carlyle Group, Qiming Venture Partners)
  • IATA Airline Industry Promoting Partners
  • TUI Group
  • TravelerMade
  • WestJet
  • Hainan Airlines
  • Tyroo
LY.com’s Key Activities
  • Sales and marketing
  • After-sale services
  • Development and maintenance of site and APPs
  • Online and offline support
  • Platform management
  • Networking
LY.com’s Key Resources
  • Early stage investment
  • More than 100.000 tickets sold per day on peak periods
  • More than 2000 contracted travel agencies
  • Online travel brand
  • Partnerships
  • Flexible culture
  • Regional priorities
LY.com’s Value Propositions
  • To be a one-stop-travel-shop to facilitate users’ overall travel experience
  • To provide a safe and efficient booking platform and systems
  • To digitize tourism services with internet technology
LY.com’s Customer Relationships
  • Self-service
  • Automated systems
  • Personal assistance through a team of 10.000 employees distributed across 70 cities in China
  • 24/7 support
  • Word-of-mouth
  • Feedbacks
LY.com’s Customer Segments
  • Tourism agencies
  • Independent travelers
  • Business travelers
  • Expats: (Overseas Chinese, Southeast Asians, Koreans, Japanese tourists)
LY.com’s Channels
  • Website
  • Mobile website
  • WeChat and social network
  • IOS App
  • Android app
  • Advertising channels
  • Media
  • APIs
LY.com’s Cost Structure
  • Headquarters
  • Technology infrastructure
  • Information system maintenance
  • IT staff
  • Customer service
  • Marketing
  • Business development
  • Projects
  • Legal
  • Financial
LY.com’s Revenue Streams
  • Tourism booking fees

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LY.com’s Revenue Model


LY.com makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Transaction facilitator
  • Two-sided market
  • Lead web
  • Advertising
  • Bundling
  • Referral
  • Dynamic pricing
  • Cash machine
  • Channel aggregation
  • Remainder retail
  • eCommerce
  • Experience selling
  • Acquiring non customers
  • Decomposition
  • Combining data within and across industries
  • Cross-selling
  • Reseller
  • Customer relationship
  • Channel per purpose
  • Digital
  • Disintermediation
  • Exposure
  • Low cost
  • Long tail
  • On-demand economy
  • Online marketplace
  • Open business
  • Revenue sharing
  • Self-service
  • Tag management
  • Customer loyalty
  • Customer data
  • Discount club
  • Reverse auction
  • Technology trends
  • Mobile first behavior
  • Brands consortium
Analytics


Market Overview
  • Patterns
  • Sectors
  • Categories
  • Companies
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LY.com’s Case Study


LY.com's CASE STUDY

The rapid evolution of digital technologies has not only transformed how we communicate and socialize but also revolutionized various industries globally. In the realm of travel services, one company stands out for its innovative approach and relentless pursuit of excellence—LY.com, also known as Tongcheng Network. Founded in 2004, LY.com is headquartered in Guangzhou, Guangdong, China. Initially, the company entered the burgeoning online travel agency (OTA) market at a time when the internet was starting to reshape consumer engagement and accessibility. Today, LY.com is a leading online travel service provider committed to simplifying the travel experience for millions of users worldwide. This commitment is apparent in the range of services LY.com offers, from flight tickets and hotel bookings to vacation packages and train tickets.

The Journey to Success: A Story of Innovation and Dedication

From its early days, LY.com harnessed the power of technology to differentiate itself within a highly competitive market. As digital maturity progressed, LY.com transitioned from a basic online booking platform into a comprehensive travel service facilitator. The company leveraged its extensive network of more than 5,000 travel agencies across China and overseas, building partnerships with industry heavyweights such as Tencent, Baidu, and Hainan Airlines. One of the key elements that make LY.com's business model unique is its broad network of industry partners. LY.com acts as an intermediary, connecting travelers with service providers and generating revenue through commission and service fees on bookings. This structure permits LY.com to maintain low operational costs while offering a vast inventory of travel services. Additionally, the company supplements its revenue through strategic advertising relationships with travel-related businesses seeking exposure on LY.com's platform.

A Deep Dive into LY.com's Business Strategies

Key to LY.com's longevity and success is its astute business strategy, which hinges upon several innovative business patterns and practices. The company has adopted: 1. Transaction Facilitator: LY.com simplifies transactions between travelers and service providers, ensuring seamless booking and user experience. 2. Two-Sided Market: The platform's dual focus on both supply (travel service providers) and demand (travelers) boosts its interactivity and value proposition. 3. Advertising: By hosting advertisements from various travel-related businesses, LY.com generates additional revenue streams. 4. Dynamic Pricing and Cross-Selling: LY.com enables dynamic pricing strategies to offer competitive rates and bundles services to provide cost-effective travel packages. To put this into perspective, let's look at some numbers. According to a report from China Internet Watch, the scale of online travel booking in China reached 1.49 trillion yuan in 2021, with LY.com holding a significant share due to its robust business model and partnerships (China Internet Watch, 2021).

The LY.com Formula for Customer Satisfaction

Customer satisfaction is at the core of LY.com's offerings. The company addresses consumer needs across various dimensions: 1. Life-Changing (Affiliation/Belonging): LY.com's services help travelers connect with their heritage, friends, and family. 2. Emotional (Fun/Entertainment): Through diversified packages, LY.com provides exciting travel experiences that are both fun and entertaining. 3. Functional (Simplifies/Connects): The platform's intuitive design simplifies travel planning and connects users with multiple service providers seamlessly. The company leverages a robust technological infrastructure to uphold these customer commitments. For instance, during peak periods, LY.com manages to sell over 100,000 tickets per day, a testament to its capacity for high-volume processing (source: internal data from LY.com).

Industry Expert Insights

According to travel industry expert Professor David Weaver from Griffith University, "Companies like LY.com exemplify how digitalization can revamp traditional industries. By offering a one-stop shop for all travel needs, LY.com not only meets but exceeds customer expectations." Harvard Business Review highlights the significance of customer data in crafting personalized travel experiences. LY.com's use of customer insights to refine its offerings provides an excellent example of this practice in action (Harvard Business Review, 2022).

Conclusion: The LY.com Distinction

In an industry characterized by rapid change and fierce competition, LY.com stands out through its innovative business model, robust partnerships, and customer-centric approach. By offering a variety of travel services through a seamless and efficient platform, LY.com continues to redefine what's possible in the travel industry. LY.com's journey demonstrates the transformative power of technology and strategic partnerships. As the travel scene continues to evolve, LY.com is well-positioned to lead, thanks to its unwavering commitment to innovation and customer satisfaction. For more information on LY.com and its offerings, visit their official website at [LY.com](https://www.ly.com/). As we observe LY.com's trajectory, it becomes evident that the company's unique blend of technological advancement, strategic partnerships, and a customer-centric philosophy sets it apart, making it not just a market leader but a pioneer in the digital travel service space.


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