Can Airbnb conquer the Chinese market?
Many large tech companies have tried to crack the market in China for many years, however, fierce competition in the world’s most populous country has been the cause of failure each time. Airbnb is now looking at innovative ways to appeal to the Chinese market and are showing real intent as they are currently in the process of doubling their investment in China.
As one of the fastest-growing start-ups, tech giants Uber have shown global dominance in many countries, however, they were unable to shake off the intense competition from rival Didi in the Chinese market, who are now active in 400 Chinese cities and are worth $35bn.
In March this year, Airbnb introduced its home-sharing service to the Chinese market as ‘’Aibiying’’ which translates as ‘’welcome each other with love’’ as the firm attempts to bring people together from all communities around the world. The rebranding is an attempt to win over the market in China, a hurdle which many other foreign tech companies have struggled to do previously. There has already been a backlash amongst Chinese consumers who have claimed that the new name given to Airbnb in China is difficult to pronounce in mandarin.
Currently, there are approximately 80,000 Airbnb listings in China compared to the wider market, of which there are around 3 million listings in 191 countries. Despite this, Airbnb is determined to grow in popularity in the Far East by significantly increasing staff and doubling in investment. Many analysts believe that the home-rental site does not necessarily need to be the main player in China to be successful.
Without doubt, Airbnb faces a vast and fiercely competitive market with rivals, Tujia offering a wider range of services than Airbnb and already boasting more than 400,000 listings in over 300 towns and cities across China. Many believe that Tujia has the home advantage as it understands the local market and its consumers, but also is aware of the regulations.
However, global presence could play in the favour of Airbnb. With more Chinese people travelling overseas than ever before, many will use the Airbnb website to search for rental accommodation. As an established brand, many travellers are likely to continue to use the service once they have returned to China. A Chinese Airbnb host has claimed that it is better equipped than local Chinese rivals in protecting hosts in the event of accidents and other issues that may occur.
Airbnb has recently released a brand-new product in the hope that they will be able to gain ground in China. ‘’Trips’’, which was launched in Shanghai, will provide tourists with local, authentic ‘’experiences’’’ rather than tour packages. To boost its hopes further, the rental start-up is now integrating more with tools such as WeChat and payment method Alipay to appeal to the wider Chinese market.
Can Airbnb compete against the local market and capitalise on the wave of Chinese millennials desiring to travel? Only time will tell.