DRSLTR 1 filename1.htm

PARTNERS JOHN ADEBIYI ¿ CHRISTOPHER W. BETTS EDWARD H.P. LAM ¿* G.S. PAUL MITCHARD QC ¿ CLIVE W. ROUGH ¿ JONATHAN B. STONE* ALEC P. TRACY* ¿ (ALSO ADMITTED IN ENGLAND & WALES) * (ALSO ADMITTED IN NEW YORK) REGISTERED FOREIGN LAWYERS Z. JULIE GAO (CALIFORNIA) RORY MCALPINE (ENGLAND & WALES) GREGORY G.H. MIAO (NEW YORK) ALAN G. SCHIFFMAN (NEW YORK) |  | SKADDEN, ARPS, SLATE, MEAGHER & FLOM 42/F, EDINBURGH TOWER, THE LANDMARK 15 QUEEN’S ROAD CENTRAL, HONG KONG TEL: (852) 3740-4700 FAX: (852) 3740-4727 www.skadden.com |  | AFFILIATE OFFICES BOSTON CHICAGO HOUSTON LOS ANGELES NEW YORK PALO ALTO WASHINGTON, D.C. WILMINGTON BEIJING BRUSSELS FRANKFURT LONDON MOSCOW MUNICH PARIS SÃO PAULO SHANGHAI SINGAPORE SYDNEY TOKYO TORONTO

Confidential

March 6, 2014

Mr. Max A. Webb

Mr. J. Nolan McWilliams

Mr. Doug Jones

Mr. Stephen Kim

Division of Corporation Finance

Securities and Exchange Commission

100 F St. NE

Washington, D.C. 20549

Re: | Tuniu Corporation (CIK No. 0001597095)

Responses to the Staff’s comment letter dated February 20, 2014

Dear Mr. Webb, Mr. McWilliams, Mr. Jones and Mr. Kim,

On behalf of our client, Tuniu Corporation, a foreign private issuer organized under the laws of the Cayman Islands (the “Company”), we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated February 20, 2014. Concurrently with the submission of this letter, the Company is submitting its revised draft registration statement on Form F-1 (the “Revised Draft Registration Statement”) and certain exhibits via EDGAR to the Commission for confidential non-public review pursuant to the Jumpstart Our Business Startups Act (the “JOBS Act”).

Securities and Exchange Commission

March 6, 2014

Page 2

To facilitate your review, we have separately delivered to you today four courtesy copies of the Revised Draft Registration Statement, marked to show changes to the draft registration statement confidentially submitted to the Commission on January 27, 2014, and two copies of the submitted exhibits.

The Staff’s comments are repeated below in bold and are followed by the Company’s responses. We have included page references in the Revised Draft Registration Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Revised Draft Registration Statement.

In addition to adding and revising disclosure in response to the Staff’s comments, the Company has updated the Revised Draft Registration Statement to include the Company’s financial statements for the full year of 2013 and reflect the Company’s recent developments.

General

1. | Please provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications. Similarly, please provide us with any research reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

The Company confirms that neither the Company nor any of its authorized representatives has presented to potential investors any written communication in reliance on Section 5(d) of the Securities Act. If any such written communication is presented to potential investors in the future, the Company will promptly provide the Staff with a copy of the communication.

The Company further confirms that to the knowledge of the Company, no broker or dealer that is participating or will participate in the Company’s offering has published or distributed any research reports about the Company in reliance upon Section 2(a)(3) of the Securities Act added by Section 105(a) of the JOBS Act. If any research report is published or distributed by any broker or dealer that is participating or will participate in its offering in the future, the Company will promptly provide the Staff with copies of the report.

Securities and Exchange Commission

March 6, 2014

Page 3

2. | Prior to printing and distribution of the preliminary prospectus, please provide us with mock-ups of any pages that include any pictures or graphics to be presented. Accompanying captions, if any, should also be provided. We may have comments after reviewing the materials.

In response to the Staff’s comment, the Company confirms that it will provide the Staff with mock-ups of any pages that include any pictures or graphics to be presented, and accompanying captions, if any, as soon as they are ready.

3. | We note you have relied on reports and publications from third-party sources, including Euromonitor, the China National Tourism Administration, the China Internet Network Information Center, and the World Tourism Organization, for data. Please provide us with the relevant portions of the materials you cite. If any of these reports or publications were commissioned by you for use in connection with the registration statement, please also provide consents of such third parties pursuant to Securities Act Rule 436 with your next amendment or tell us why you believe you are not required to do so.

In response to the Staff’s comment, the Company has provided in Annex A copies of the reports and publications from third-party sources, supporting the various industry-related statements in the Revised Draft Registration Statement. The specific portions of these documents are also marked for your easy reference. The Company further advises the Staff that other than the report prepared by iResearch Consulting Group, none of these documents were commissioned by the Company.

4. | In this regard, we note that you commissioned iResearch Consulting Group to prepare a report portions of which are included in the prospectus. Please provide us with a copy of this report and file the consent of iResearch as an exhibit to the registration statement.

In response to the Staff’s comment, the Company has provided in Annex B a copy of the report prepared by iResearch Consulting Group. The Company has also submitted the consent of iResearch Consulting Group as Exhibit 99.3 to the Revised Draft Registration Statement.

5. | Please include the related US dollar equivalent every time you include an RMB number in the narrative instead of just for the more recent comparative figures. We believe doing so will make the prospectus easier for investors to understand.

Securities and Exchange Commission

March 6, 2014

Page 4

The Company respectfully advises the Staff that according to Rule 6620.5 of the Financial Reporting Manual issued by the Commission’s Division of Corporation Finance:

“Dollar equivalent or convenience translations are generally not permitted, except that a convenience translation may be presented only for the most recent fiscal year and interim period. Translation should be made at the exchange rate on the balance sheet date or most recent date practicable, if materially different. The rate used for the convenience translation should generally be the rate that the issuer would use if dividends were to be paid in U.S. dollars.”

However, in response to the Staff’s comment, the Company has revised the disclosure to provide the U.S. dollar equivalent in each place where an RMB amount of a non-financial data is given.

Prospectus Summary, page 1

Our Business, page 1

6. | Refer to the first sentence of the third paragraph of this section. Please provide us with support for your statements that your brand is “trusted” and “widely recognized” and briefly describe how you measure each of these. Revise the third paragraph on page 88 in this manner as well.

In response to the Staff’s comment, the Company is supplementally providing copies of the underlying support materials for the referenced statements in Annex C attached hereto.

The Company respectfully advises the Staff that Tuniu was among the top three online leisure travel brands and ranked first in user satisfaction among leisure travel websites in China in 2013 according to iResearch. In response to the Staff’s comment, the Company has revised the disclosure on page 91 of the Revised Draft Registration Statement.

7. | The last sentence of the fourth paragraph appears to say that your average gross booking for a group tour is $272. Please clarify whether this is correct. Tell us, with a view to revised disclosure, why this number is so low and also how large is your typical group tour approximately.

The Company respectfully advises the Staff that the apparently low average gross bookings for organized tours is due to the low average gross bookings for local tours which are part of the Company’s organized tour product portfolio. Local tours, which accounted for 65.2% of the number of trips of the Company’s organized tours in 2013, mainly consist of weekend getaways and themed tours, such as water-village tours, historical-town tours, ski tours and hot spring tours, with a typical duration of one to three days. In 2013, the average gross bookings for organized tours (excluding local tours) were RMB4,481 (US$740), while the average gross bookings for local tours were RMB361 (US$60). In order to provide a more meaningful disclosure concerning the average gross booking for organized tours, the Company has revised the disclosure on page 12 of the Revised Draft Registration Statement to separately disclose the gross bookings, number of trips and average gross bookings per trip for organized tours (excluding local tours) and local tours.

Securities and Exchange Commission

March 6, 2014

Page 5

8. | Please remove the subjective qualifier “healthy” in the reference to your cash flow from operations on pages 2, 63 and 88.

In response to the Staff’s comment, the Company has revised the disclosure on pages 2, 65 and 90 of the Revised Draft Registration Statement to remove the subjective qualifier “healthy”.

Summary Consolidated Financial Data and Operating Data, page 10

9. | We note you intend to present “net loss per ADS” information on pages 10 and 61. Please explain to us what this measure represents and how it is to be computed (that is, tell us all of the intended components of the computation).

The Company respectfully advises the Staff that “net loss per ADS” is calculated in an identical manner as “net loss per ordinary share,” with ADS representing a certain number of Class A ordinary shares, which is to be determined and defined in the subsequent amendments to the Revised Draft Registration Statement. In computing “basic net loss per ADS”, the numerator, representing net loss attributable to ordinary shareholders, is divided by the denominator of weighted average number of ordinary shares outstanding during the period, converted into ADSs. In computing “diluted net loss per ADS”, the same numerator mentioned above is divided by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period, converted into ADSs. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the preferred shares using the if-converted method, and ordinary shares issuable upon the exercise of share options using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive.

The earnings (loss) per share computation and the components of the computation are also discussed on pages F-34 and F-35 of the Revised Draft Registration Statement.

Securities and Exchange Commission

March 6, 2014

Page 6

Use of Proceeds, page 47

10. | We believe that the Use of Proceeds section is one of the most important in the prospectus as it tells investors how their investments will be used. Please remove from this section uses which do not further this end, such as establishing a public market for your securities and providing liquidity for share compensation to employees. You may disclose that elsewhere in the prospectus.

In response to the Staff’s comment, the Company has revised the disclosure on pages 8 and 49 of the Revised Draft Registration Statement.

11. | Also, in the next amendment, please quantify each of the uses you mention as subsets of general corporate purposes so that investors can have a better understanding of your intended uses of their money.

In response to the Staff’s comment, the Company has revised the disclosure on pages 8 and 49 of the Revised Draft Registration Statement to divide the proposed uses into four categories. The Company respectfully advises the Staff that the amount allocated to each category will be included in the subsequent amendments to the Revised Draft Registration Statement after the estimated offering size and price range have been determined.

Corporate History and Structure, page 56

Agreements that Provide us Effective Control over Nanjing Tuniu, page 57

Equity Interest Pledge Agreement, page 58

12. | Please disclose whether you have registered the equity interest pledge agreement with the local SAIC authority in China. In addition, please revise the last risk factor on page 24 to describe the risks if the equity pledge created under the equity pledge agreement is not perfected or is considered unenforceable.

The Company respectfully advises the Staff that it has completed the registration of the equity interest pledge under the equity interest pledge agreement among Beijing Tuniu and the shareholders of Nanjing Tuniu with Xuanwu Bureau of Nanjing Administration for Industry and Commerce. Therefore, the Company has revised the disclosure on page 60 of the Revised Draft Registration Statement.

Securities and Exchange Commission

March 6, 2014

Page 7

Management’s Discussion and Analysis, page 63

13. | Please include additional discussion and analysis regarding the relationship between your revenue growth and the growth in gross bookings. In this regard, please discuss the relationship between changes in cost of revenues and changes in revenues, and place your operating margin in context in light of the industry in which you operate.

In response to the Staff’s comment, the Company has revised the disclosure on pages 66 and 67 of the Revised Draft Registration Statement.

Cost of Revenues, page 65

14. | It appears that cost of revenues contains types of costs that are common to both organized and self-guided tours. Accordingly, please disclose the amount of cost of revenues attributed to each revenue category. In so doing, please consider disclosing the material components within the respective cost of revenues presented.

The Company respectfully advises the Staff that the items of cost to suppliers disclosed in its cost of revenues are for organized tours only, which accounted for 93.3%, 94.0% and 95.6% of the Company’s total cost of revenues in 2011, 2012 and 2013, respectively, and cost to suppliers of the Company’s self-guided tours is not included in the cost of revenues as revenues from self-guided tours are recognized on a net basis.

Other components of the Company’s cost of revenues, including salaries and benefit for personnel directly related to providing products and services, office rental and depreciation and other office related expenses, and network maintenance costs such as bandwidth costs and data center costs, accounted for 6.7%, 6.0% and 4.4% of the Company’s total cost of revenues in 2011, 2012 and 2013, respectively. These components are common to all of the Company’s travel products and services which consist of organized tours, self-guided tours and other travel-related services. As a result, other than cost to suppliers, other cost of revenues components cannot be allocated among different product lines. Therefore, the Company respectfully advises the Staff that it is not able to disclose the other cost of revenues components based on different product lines.

15. | We note your disclosure on page 66 regarding product development expenses and sales and marketing expenses and your disclosure in the last risk factor on page 13 that you expect to continue to incur significant expenses to expand and grow your business. Please expand your discussion and analysis of your product development expenses and sales and marketing expenses and their relationship to your revenue growth to date. Please also discuss all known trends and uncertainties with respect to these expenses and your future growth and expansion. Your revised discussion should enable prospective investors to better assess the likelihood you will be able to generate profitable growth in the future. Please revise the Summary in this manner as well.

Securities and Exchange Commission

March 6, 2014

Page 8

In response to the Staff’s comment, the Company has revised the disclosure on pages 65 and 68 of the Revised Draft Registration Statement.

Critical Accounting Policies and Estimates, page 66

Revenue Recognition, page 66 Customer Incentives, page 67

16. | Please clarify in the first line on page 68 whether or not customers have an obligation to make future purchases. Refer to the similar disclosure located on page F-17 and conform these disclosures as appropriate.

In response to the Staff’s comment, the Company has revised the disclosure on page 70 of the Revised Draft Registration Statement.

Share-Based Compensation, page 69

17. | Please disclose whether or not your estimates used to determine the fair value of awards in computing your share-based compensation will change, and if so, how, once the underlying shares begin trading.

In response to the Staff’s comment, the Company has revised the disclosure on pages 72, 74 and 75 of the Revised Draft Registration Statement. In addition, the Company respectfully advises the Staff that it has only granted options that are equity-classified since the adoption of the 2008 Plan, the fair value of which is determined on the respective grant dates using a binomial option pricing model. In accordance with ASC 718, the fair value of awards will not change unless there is a modification of the stock awards, and the Company did not modify terms of any awards granted during the periods presented.

Due to the uncertainty of the initial public offering (the “IPO”) timeline, and the additional options granted in the fourth quarter in 2013, the Company disclosed that the share-based compensation expense of approximately US$3 million would be recognized upon completion of the IPO. Total fair value of awards granted, and the total share-based compensation expense would not be impacted by the IPO timeline, but the expenses to be recognized upon completion of the IPO would change depending on the timing when the underlying shares begin trading.

Securities and Exchange Commission

March 6, 2014

Page 9

Taxation, page 72

18. | Please disclose in the last paragraph on page 72 the term and expiration date of the high and new technology enterprises (HNTE) qualification and the anticipated timeline for approval of the renewal of the HNTE qualification. Additionally, please reconcile your disclosure here with your disclosure on page F-24 that implies you have already renewed the HNTE certificate. Please also clarify whether you are eligible for the preferential tax rate during the period in which renewal is pending, even if the previous certificate has expired. Please revise the last risk factor on page 34 in this manner as well.

In response to the Staff’s comment, the Company has revised the disclosure on pages 35, 75, 76 and F-24 of the Revised Draft Registration Statement.

The Company also respectfully advises the Staff that Nanjing Tuniu obtained the HNTE renewal approval at the end of 2013 for additional three years (from fiscal 2013 to fiscal 2015), therefore, the Company believes that to the extent there is taxable income under the EIT laws, Nanjing Tuniu is eligible to continue applying a preferential tax rate of 15% so long as Nanjing Tuniu maintains the HNTE qualification status and duly conducts relevant EIT filing procedures with the tax authorities.

The HNTE application process involves a series of procedures:

(i) the entity completes a self-assessment prior to applying for the HNTE renewal approval based on criteria specified in the regulation;

(ii) the assessment institution releases a public notification for the renewal and invites any enterprise or individual dissenting from the HNTE qualification of a certain enterprise to submit its dissent to the competent authority during a 15 business day period (the “Dissenting Period”) following the date of such public notification;

(iii) the assessment institution grants the HNTE certificate subsequent to the grant of renewal approval and the expiration of the Dissenting Period, if no dissent submitted during such Dissenting Period;

(iv) the applying entity files the HNTE certificate with the tax authority and confirms the eligibility for the preferential tax rate of 15%; and

Securities and Exchange Commission

March 6, 2014

Page 10

(v) the entity completes its EIT annual filing.

Generally after completion of step (i) and step (ii) above, if no dissent is submitted, an entity would consider that the preferential tax rate of 15% can be applied as the remaining steps are considered perfunctory to the application process.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012, page 74

Cost of Revenues, page 75

19. | Please analyze the reason for the change as a percentage of revenues from 96.9% in the prior year period to 93.0% in the current year period. Please consider the need for analysis of material changes on this basis for other expense line items.

In response to the Staff’s comment, the Company has revised the disclosure on page 78 of the Revised Draft Registration Statement and the Company has updated the Revised Draft Registration Statement to include the Company’s financial statements for the full year of 2013.

Liquidity and Capital Resources, page 77

20. | It appears from your disclosures that customers generally prepay you for your travel services. It also appears from your disclosures that prepayments and other current assets primarily represent prepayments to your travel suppliers for reserving tour availabilities, accounts payable primarily represents amounts due to your travel suppliers for your travel products, and advances from customers represent amounts customers pay in advance to purchase your travel services. We note that prepayments to suppliers, accounts payable and advances from customers appear to be material to your financial position, liquidity and operating cash flows, and that they appear to have a close correlation to one another. In this regard, please expand your disclosure to discuss how these three elements of your operations relate to one another in managing your financial position, liquidity and cash flows. For example, discuss in greater detail how amounts received in advance from customers are directed to prepayments to suppliers, applied against accounts payable or used for other purposes, and the timing that occurs between these elements. We believe such disclose will enable investors to better understand the drivers of your financial position, liquidity and operating cash flows.

Securities and Exchange Commission

March 6, 2014

Page 11

In response to the Staff’s comment, the Company has revised the disclosure on page 80 of the Revised Draft Registration Statement.

21. | Your discussion appears to focus in large part on how net cash flows of operating activities were derived for each period with your references to accrual based “net loss” and the indicated changes in items that are presented on the statement of cash flows. Please note that reference to such items may not provide a sufficient basis for an investor to fully understand comparative changes in net operating cash (i.e., the items that directly affected cash and how cash was so affected). Please revise your discussion to analyze the material factors that directly affected the level of and variance in the amount of net cash flows of operating activities between comparative periods presented. For further guidance, refer to Section IV.B.1 of “Interpretation: Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is available on our website at http://www.sec.gov/rules/interp/33-8350.htm. Additionally, quantify all cited factors so that investors may understand the magnitude and relative impact of each.

In response to the Staff’s comment, the Company has revised the disclosure on page 81 of the Revised Draft Registration Statement.

Investing Activities, page 79

22. | In regard to the nine months ended September 30, 2013, it appears from the statement of cash flows that you purchased short term investments of RMB451.8 million rather than received proceeds of this amount from the disposal of these investments. Please revise as appropriate.

In response to the Staff’s comment, the Company has revised the disclosure on page 81 of the Revised Draft Registration Statement.

Industry Overview, page 84

Factors Affecting the Competitive Landscape of Online Leisure Travel , page 86

23. | Please expand your discussion of competitive pricing in the first paragraph on page 87, including a discussion of how competitive pricing pressures influences the price that you pay for travel packages and the price at which you sell those travel packages. We note in this regard your disclosure in the first bullet point on page 75 and the second bullet point under “Revenues” on page 76, where you attribute to competition slower revenue growth relative to growth in gross bookings.

Securities and Exchange Commission

March 6, 2014

Page 12

In response to the Staff’s comment, the Company has revised the disclosure on page 89 of the Revised Draft Registration Statement.

Business, page 88

Overview, page 88

24. | Please disclose the basis for statements regarding your competitive position, including the statement in the second paragraph on page 88 that you are an “early mover” in the Chinese online leisure travel market and the statement in the fifth paragraph on page 88 that you offer your products at “competitive prices.” Refer to Item 4.B.7 of Form 20-F.

In response to the Staff’s comment, the Company has revised the disclosure on page 90 of the Revised Draft Registration Statement and made corresponding changes on pages 1 and 65 of the Revised Draft Registration Statement. In addition, the Company respectfully advises the Staff that it conducts regular price comparison for our travel products to assess the competitiveness of our pricing. In response to the Staff’s comments, the Company has revised the disclosure on page 98 of the Revised Draft Registration Statement.

Our Competitive Strengths, page 89

Leading Online Leisure Travel Company, page 89

25. | Please provide us with support for your statement in the first paragraph on page 90 that you have “developed some of the most comprehensive product offerings” for certain overseas destinations.

The Company respectfully advises the Staff that its travel products cover over 80 of the 105 resort islands in Maldives. In addition, in Europe, the Company offers over 7,000 SKUs of travel products covering 25 countries.

Securities and Exchange Commission

March 6, 2014

Page 13

Robust Technology Capabilities, page 90

26. | Please provide us with support for your statement that your technology is “highly reliable” and “scalable.”

The Company respectfully advises the Staff that the Company has two internet data centers, of which one is located in Beijing and one is located in Nanjing, and the two internet data centers act as back up to each other. In addition, the distributed, load-balanced computing infrastructure of the Company’s system contributed to the reliability and scalability of the Company’s technology infrastructure. The infrastructure can be expanded easily as data storage and users of its online platform increase.

Our Strategies, page 91

27. | Please disclose the anticipated timeframe and expected costs, to the extent material, to implement each of the strategies you describe on pages 91-92.

The Company respectfully advises the Staff that it is a continuing effort for the Company to pursue the strategies described on pages 93 and 94 of the Revised Draft Registration Statement. In response to the Staff’s comment, the Company has revised the disclosure on page 93 of the Revised Draft Registration Statement to include the anticipated timeframe of some of its plans. Furthermore, the Company has revised the disclosure on pages 8 and 49 of the Revised Draft Registration Statement to include the intended uses of the proceeds from the offering.

Supply Chain Management, page 95

Supply Management, page 96

28. | Please disclose in the notes to the financial statements how you account for inventory risks you assume during peak travel periods and for certain destinations and travel routes. In so doing, discuss your exposure to risk of loss in these cases.

In response to the Staff’s comment, the Company has revised the disclosure on pages 98 and F-17 of the Revised Draft Registration Statement.

Regulations on Offshore Financing, page 113

29. | We note that you qualify the discussion of shareholders who are PRC citizens who have registered with the local SAFE branch as required by SAFE Circular 75 “[t]o [y]our knowledge.” Please tell us why you have included this knowledge qualifier, particularly given that your officers and directors beneficially own a substantial majority of your ordinary shares. To the extent you continue to qualify this discussion, it is not appropriate to include within the scope of this qualification officers, directors, or other persons affiliated with you.

Securities and Exchange Commission

March 6, 2014

Page 14

The Company respectfully advises the Staff that it does not have access to information regarding whether any ultimate beneficial owners of all of its shareholders are PRC residents. However, to the Company’s knowledge, all of the Company’s shareholders who are PRC citizens and hold interest in it have registered with the local SAFE branch as required by SAFE Circular 75.

Principal [and Selling] Shareholders, page 122

30. | Beneficial ownership is not determined based on pecuniary interest for the purposes of Exchange Act Rule 13d-3. Please revise the disclaimers of beneficial ownership in footnotes (3) — (7) and (10) to the table of beneficial owners accordingly.

In response to the Staff’s comment, the Company has revised the disclosure on page 125 of the Revised Draft Registration Statement.

31. | Please revise footnotes (8) and (12) to the table of beneficial owners by identifying the natural person or persons who exercise voting power and investment power over the ordinary shares held by Esta Investments Pte Ltd. and RS Empowerment, Inc.

In response to the Staff’s comment, the Company has revised the disclosure on page 125 of the Revised Draft Registration Statement.

Related Party Transactions, page 125

Contractual Arrangements, page 125

32. | Please disclose here and quantify the percentage ownership of shareholders in Nanjing Tuniu who are also directors, officers, and ultimate shareholders of Tuniu Corp. Additionally, please disclose here the potential conflicts of interest between these shareholders and the company. We note in this regard the last risk factor on page 25.

In response to the Staff’s comment, the Company has revised the disclosure on page 127 of the Revised Draft Registration Statement.

Securities and Exchange Commission

March 6, 2014

Page 15

Taxation, page 149

United States Federal Income Tax Considerations, page 150

33. | Please remove the characterization of the discussion of material U.S. federal income tax considerations as a “summary.”

The Company respectfully advises the Staff that the word “summary” is used in the Revised Draft Registration Statement because the referenced section is a summary of the U.S. federal income tax consequences of the acquisition, ownership, and disposition of the ADSs by U.S. Holders and is therefore necessary in the context.

Underwriting, page 156

[Directed Share Program], page 159

34. | You contemplate that the underwriters may reserve five percent of the ADSs to be issued by you for sale at the IPO price to directors, officers, employees, business associates, and related persons. Please provide us with any materials given to potential purchasers of the reserved shares.

The Company respectfully advises the Staff that the Company has not yet decided whether to establish a directed share program (the “DSP Program”) in connection with its initial public offering. If the Company decides to establish a DSP Program, it will appoint a designated underwriter (the “Designated Underwriter”). The Company expects that the Designated Underwriter will send a package of materials to the prospective participants of the DSP Program after the preliminary prospectus containing an offering price range is publicly filed with the Commission. Such package may include, subject to changes by the Designated Underwriter to be appointed, (a) an explanatory letter accompanied by the preliminary prospectus, (b) a confidential indication of interest questionnaire, (c) a directed share account application and information form, (d) an IRS Form W-9, (e) an IPO and Voluntary Initiative Certification form for determining eligibility to participate in the DSP Program under the rules of the Financial Industry Regulatory Authority, and (f) a list of answers to commonly asked questions. The materials (other than the preliminary prospectus) will contain only the statements required or permitted to be included therein by the provisions of Rule 134. The Company will supplementally submit copies of these materials for the Staff’s review as soon as they become available.

Securities and Exchange Commission

March 6, 2014

Page 16

Notes to the Consolidated Financial Statements, page F-7

Note 2. Principal Accounting Policies, page F-12

(n) Revenue Recognition, page F-16

35. | Please tell us and disclose your accounting for customer refunds, including how and when refunds are determined and paid or credited to customers.

The Company respectfully advises the Staff that revenues from organized tours and self-guided tours are recognized when the tours end, and payments collected from customers are recorded in “advances from customers” on the consolidated balance sheets prior to revenue recognition. If customer cancellations were to occur, they are identified prior to when revenue is recognized. The Company also does not recognize revenue if customer refunds are warranted due to customer satisfaction issues or other reasons, which is generally known at the end of each tour when revenue is recognized. As such, payments received from customers are deferred on the Company’s financial statements until refunds are issued. In response to the Staff’s comment, the Company has revised the disclosure on page F-16 of the Revised Draft Registration Statement.

(s) Share-based Compensation, page F-18

36. | One of the exercise events you disclose for vested options is when the optionee obtains all necessary governmental approvals and consents required. It appears you consider this and the other events indicated in your disclosure to be performance conditions. Please explain to us and disclose as appropriate how (i) this event becomes operational by option holders, (ii) often this event is used to enable exercise of options held and (iii) this event is factored into your recognition of compensation expense.

In response to the Staff’s comments, the Company respectfully advises the Staff that:

(i) the performance condition referenced to above is currently not operational by option holders due to regulatory limitation of PRC citizens registering with the State Administration of Foreign Exchange (SAFE) for options held relating to a company of which the underlying shares are not publicly traded. Pursuant to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Employee Shareholding Plan and Stock Option Plans of Overseas Publicly-Listed Companies, promulgated by SAFE in March 2007 and the Stock Option Rules promulgated by SAFE in February 2012 which replaces the previous rule, PRC residents are permitted to participate in stock incentive plan in an overseas publicly listed company, subject to the completion of certain procedures. However, these rules do not apply to the overseas companies of which the shares are not publicly traded. Such restriction prohibits PRC citizens from exercising these options until the Company’s shares become publicly traded. As a result, the Company believes that satisfaction of this performance condition is considered improbable until the Company’s shares become publicly traded. The legal opinion of Jun He Law Offices, the Company’s PRC legal counsel, also supports this conclusion;

Securities and Exchange Commission

March 6, 2014

Page 17

(ii) since the Company’s adoption of the 2008 Plan, no options were exercisable or exercised as a result of this event; and

(iii) this event is one out of the three performance conditions as disclosed in the notes to the Company’s consolidated financial statements. As soon as one of the three performance conditions becomes probable, the Company will record a significant cumulative share-based compensation expense for the options to the extent the service condition has been satisfied as of that date. Given the current status of the SAFE regulations and the absence of other exercisable events, the Company has not recorded any stock-based compensation expense.

Note 8. Income Taxes, page F-23

37. | In regard to your net operating loss carryforwards, please disclose how long they can be carried forward, the amount that expires in 2013 and 2014, and if there are any limitations or restrictions upon your ability to use them.

In response to the Staff’s comment, the Company has revised the disclosure on page F-26 of the Revised Draft Registration Statement.

Note 17. Condensed Financial Information of the Parent Company, page F-34

38. | We note the line items in the balance sheet for amounts due from/to related parties. Please provide the applicable disclosures pursuant to ASC 850-10-50-1 in regard to your related party disclosures. In connection with this, tell us your consideration of the disclosures specified in Rule 4-08(k) of Regulation S-K and revise your disclosures as appropriate.

In response to the Staff’s comment, the Company respectfully advises the Staff that these amounts relate to amounts due from or to the Company’s subsidiaries, not related parties pursuant to ASC 850. Accordingly, the Company has revised the disclosure on pages F-37, F-38 and F-39 of the Revised Draft Registration Statement.

Securities and Exchange Commission

March 6, 2014

Page 18

Notes to the Unaudited Condensed Consolidated Financial Statements, page F-39

Note 2. Principal Accounting Policies, page F-44

(n) Recently Issued Accounting Pronouncements, page F-50

39. | Since it appears that ASU No. 2013-02 is effective for you beginning with your fiscal 2013 period, please disclose the effect, if any, of this standard on your fiscal 2013 financial statements included in the filing. Conform the like disclosure that is on page 82.

In response to the Staff’s comment, the Company has revised the disclosure on page F-21 and conformed the disclosure on page 85 of the Revised Draft Registration Statement.

Note 8. Convertible Preferred Shares, page F-52

40. | It appears that the fair value per share of the Series D preferred shares issued directly to Esta in August 2013 was approximately US$ 2.95. We also note that the fair value per share of the 3,628,579 Series A preferred shares that were in substance repurchased from Gobi in August 2013 was approximately US$2.76. It appears that the 2,864,673 Series A preferred shares reissued in August 2013 to Gobi that were immediately redesignated as Series D preferred shares was recorded at a value per share of approximately US$ 1.75. Please explain to us why it would not be appropriate for the fair value per share for the 2,864,673 Series A shares reissued in August 2013 to be the same as one of the other indicated per share fair values for preferred shares transacted in that month, and how you would have recorded the transaction if it was.

The Company respectfully advises the Staff that additional details on the transaction related to the redesignation are set out as follows:

The economic objective of the transaction with Esta in August 2013 was an issuance of 18,142,893 Series D preferred shares. Esta wanted to purchase 18,142,893 Series D preferred shares from the Company and the Company received US$50,000,000 altogether from Esta for the shares at an average price of US$2.7559 per share. While the Company could have issued all 18,142,893 shares to Esta directly at US$2.76 per share, the Company completed the issuance in two parts solely to resolve a mismatch in registration records identified (as described below).

Securities and Exchange Commission

March 6, 2014

Page 19

Prior to the issuance of Series D preferred shares, a mismatch in the share register of the Company and the record of State Administration of Foreign Exchange (SAFE) was identified. Specifically, the share register of the Company reflected the cancellation of Gobi’s shares reacquired from the 2011 Repurchase, but the PRC residents who indirectly hold shares of the Company did not successfully complete the registration process to update the SAFE record for the same transaction, because according to the SAFE’ internal policies which were not disclosed to the Company, such update registration arising from repurchase and cancellation of preferred shares were not accepted. Nonetheless, the redesignation between different classes of shares and shares transferred between shareholders will not result in the circumstance that the PRC residents’ registration update application will not be accepted by SAFE. Therefore, the Company wanted to take the opportunity to resolve the mismatch in the records through a redesignation concurrently with the issuance to Esta and avoid any future confusion or misunderstanding as a result of the record mismatch. As such, instead of issuing all 18,142,893 Series D preferred shares to Esta directly, the Company split such issuance in two parts based on the following steps:

Part 1 – Direct issuance:

(i) The Company issued 15,278,220 Series D preferred shares at US$2.95 per share to Esta directly;

(ii) The Company collected US$45,000,000 from Esta;

Part 2 – Redesignation:

(iii) The Company reissued 2,864,673 Series A preferred shares at US$1.75 per share to Gobi (the same purchase price in 2011 when the Company repurchased these shares from Gobi);

(iv) The Company redesignated such Series A preferred shares on an one-for-one basis to an equal number of Series D preferred shares;

(v) Gobi sold 2,864,673 Series D preferred shares at US$1.75 per share to Esta;

(vi) Gobi collected US$5,000,000 from Esta; and

(vii) The Company collected US$5,000,000 from Gobi.

Securities and Exchange Commission

March 6, 2014

Page 20

The reissuance of Series A preferred shares in step (iii) is to facilitate the redesignation from Series A preferred shares to Series D preferred shares, which resolved the mismatch in record mentioned above. As indicated by the steps above, the redesignation of Series A preferred shares was based on the same terms as the 2011 Repurchase (US$1.75 per share). This is because the purpose of the arrangement is purely to resolve the record mismatch through a redesignation of shares. From Gobi’s perspective, Gobi sold the Series A preferred shares to the Company back in 2011 and should not give away or receive any additional value as a result of the reissuance in 2013. Since the substance of the transaction is an issuance of 18,142,893 Series D preferred shares to Esta at an average price of US$2.76 per share, the Company recorded Series D preferred shares issued at US$2.76 per share. Additionally, the economic substance behind this redesignation as part of the issuance of Series D preferred shares to Esta is different from that behind the redesignation of 3,628,579 Series A preferred shares in the issuance of Series D preferred shares to DCM, a separate event that took place during the same month. In the latter case, the Company gave away value to Gobi when the Company redesignated Gobi’s Series A preferred shares to Series D preferred shares, which had a higher fair value that Series A preferred shares. The transaction was originated from Gobi’s desire to sell 3,628,579 Series A preferred shares and DCM’s interest to invest in Series D preferred shares of the Company. The Company could have separately repurchased Series A preferred shares from Gobi and issued new Series D preferred shares to DCM. However, to avoid creating a mismatch in record as previously described, the Company decided to pursue a redesignation of Gobi’s Series A preferred shares to Series D preferred shares such that Gobi could sell the redesignated shares to DCM at the fair value of Series D preferred shares in August 2013. The Company accounted for the redesignation as an extinguishment of Gobi’s Series A preferred shares through the issuance of Series D preferred shares and recorded the difference between the fair value of Series D preferred shares and the carrying value of Series A preferred shares for the relevant shares as deemed dividend.

In response to the Staff’s comment regarding how the transaction would have been recorded if Series A preferred shares were reissued at one of the other indicated per share fair values, the Company would record the Series A preferred shares reissued to Gobi and Series D preferred shares issued to Esta at their respective fair value and any difference between the consideration received and fair value as contribution from/to. However, the Company believes that recording of Series A preferred shares reissued in August 2013 at one of the other indicated per share fair values would be inconsistent with the economic substance of the transaction as described above.

Securities and Exchange Commission

March 6, 2014

Page 21

Note 13. Unaudited Pro Forma Balance Sheet and Loss Per Share for Conversion of Preferred Shares, page F-60

41. | Our understanding from your disclosures of the economics of the transactions is that the redesignation of the 3,628,579 Series A preferred shares in August 2013 is, in substance, a repurchase by you of those shares from one party in which deemed dividends were recognized accompanied by a concurrent sale by you of 18,142,893 Series D preferred shares to another party. Accordingly, it is not clear to us why it is appropriate for the pro forma effect of the conversion of preferred shares to exclude the deemed dividends recognized from the pro forma numerator calculation. Your disclosed reasoning for excluding the deemed dividends appears to us to be more in regard to presentation of a projection. Please advise, and revise as appropriate.

In response to the Staff’s comment, the Company has revised the disclosure on pages F-34 and F-35 of the Revised Draft Registration Statement.

42. | Please explain to us your treatment of the issuance costs associated with the preferred shares in the pro forma effect of the conversion of the shares. We understand from your disclosures that these costs are accretive to the redemption values of the preferred shares.

The Company respectfully advises the staff that it did not reflect accretion related to the issuance costs in the effect of the preferred shares conversion because the convertible preferred shares are not redeemable until the occurrence of a liquidation event or a deemed liquidation event (which specifically excludes any transaction taken solely for the purpose of facilitating the Company’s sale of ordinary shares in a public offering pursuant to a registration statement). Consistent with ASC 480-10-S99-3A paragraph 15, since the convertible preferred shares are not currently redeemable, the Company has assessed that no subsequent accretion to the respective redemption values is necessary since it is not probable a liquidation event or deemed liquidation event is to occur. There will also be no accretion recorded upon the IPO of the Company.

In response to the Staff’s comment, the Company has clarified the referenced disclosure on page F-27 of the Revised Draft Registration Statement.

Securities and Exchange Commission

March 6, 2014

Page 22

Item 7. Recent Sales of Unregistered Securities, page II-1

43. | From disclosures elsewhere in your filing, it appears that the consideration for the 15,278,220 Series D preferred shares sold to Esta Investments Pte Ltd. on August 28, 2013 was US$45,000,000.00 and not the US$50,000,000.00 disclosed here. Please advise and revise as appropriate.

The Company respectfully advises the Staff that, 15,278,220 Series D preferred shares were issued to Esta Investments Pte Ltd. for US$45,000,000. On the same day, the Company also reissued 2,864,673 Series A preferred shares to Gobi Fund II, L.P. and redesignated them into the same number of Series D preferred shares. The 2,864,673 Series A preferred shares were transferred to Esta Investments Pte Ltd. for US$5,000,000. US$5,000,000 is the sum of the amounts that Esta Investments Pte Ltd. paid for all the Series D preferred shares it received on August 28, 2013. These transactions were described in “Description of Share Capital – History of Securities Issuances – Preferred Shares”. In response to the Staff’s comment, the Company has revised the disclosure on page II-1 of the Revised Draft Registration Statement.

* * *

If you have any questions regarding the Revised Draft Registration Statement, please contact the undersigned at +852 3740-4850 or julie.gao@skadden.com.

Very truly yours,
/s/ Z. Julie Gao
Z. Julie Gao

cc: | Dunde Yu, Chief Executive Officer, Tuniu Corporation

Conor Chia-hung Yang, Chief Financial Officer, Tuniu Corporation

Jack Li, Partner, PricewaterhouseCoopers Zhong Tian LLP

Matthew Bersani, Partner, Shearman & Sterling LLP

Shuang Zhao, Partner, Shearman & Sterling LLP

ANNEX A

ANNEX B

Annex C

1

2

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Xinhuanet.com in December 2013

3

Most Popular Website Award by Sogou.com in

November 2013

4