Why Tujia is not Airbnb!

  1

By WENDY TANG

Airbnb has officially announced to the world that it will expand its services in the Chinese market from mid-August. But what of the local competition? Amongst a slew of smaller competitors, the largest of the new breed of hotel-booking startups is Tujia. Despite comparisons in the local media, U.S.-based online home rental service Airbnb, is not in fact all that similar to Tujia and they differ importantly on some key points.

Tujia

Unlike Airbnb, which serves as a platform to connect property owners with travelers, Tujia in fact manages the properties listed on their website and works with Chinese real estate developers to rent out unsold inventory.Tujia believes this to plainly to be a more effective way to obtain apartment resources in the Chinese market.

Founding the company in 2011 in Beijing, Tujia’s CEO, Luo Jun, has stated in an interview with industrial website jiemian.com, the main obstacle in the way of running a home rental business in China is that Chinese home owners are generally not willing to list their homes on a public website.

“When I first tried to negotiate renting out some properties in Hainan, the owner of the properties thought I was trying to scam him” Luo said.

By refocusing their listing strategy, Tujia has since managed to sign on more than 310,000 properties in major Chinese cities and in more than 200 travel destinations. The Tujia mobile phone app received more than 40 million downloads in total at the end of June, jiemian.com reported. To list their properties with Tujia, property owners are required to have at least 10 apartments or 30 rooms. Tujia charges 100,000 yuan (USD 16,000) as a deposit and 6 % of the rental income for using its brand and service.

Tujia aims to target business people who need high-class furnishings for meetings, parties and holidays. The company claims to provide five-star hotel service including airport pick up, kitchen facilities and hotel soaps and linens. They also connect prospective customers who are interested in buying property as an investment. By verifying the authenticity of the photos and inspecting the properties, the company builds trust between customers and property owners and promises refunds in the event of fraud.

Tujia aims to target business people who need high-class furnishings for meetings, parties and holidays. The company claims to provide five-star hotel service including airport pick up, kitchen facilities and hotel soaps and linens. They also connect prospective customers who are interested in buying property as an investment. By verifying the authenticity of the photos and inspecting the properties, the company builds trust between customers and property owners and promises refunds in the event of fraud.

Airbnb

The San Francisco-based home rental giant and “Sharing Economy” pioneer, Airbnb, claims to have listed more than 15 million apartments spread over 34,000 cities in 191 countries since 2008. It derives its income primarily from charging both hosts and guests a service fee at each transaction. For travelers, it charges a 6% to 12% fee when a reservation is booked. Hosts are deducted a 3% fee when a booking is completed.

Airbnb’s China strategy has mainly targeted Chinese travelers going overseas. Brian Chesky, CEO of Airbnb, wrote in a blog post that outbound travel from Chinese guests through Airbnb grew 700% in 2014 and China is the company’s fastest growing outbound market.

Airbnb has of late changed tack however, having recently accepted listings for properties in major tier-one Chinese cities like Beijing, Shanghai, Guangzhou and Shenzhen. Airbnb hopes to attract both domestic and international travelers alike and will expand its services in the Chinese market following the conclusion of a slated fundraising round expected to be sourced primarily from Chinese investors.

“At Airbnb, our mission is to help create a world where anyone can belong anywhere, and with nearly 1.5 billion people living in China, it’s clear that this country is an important part of our global community,” wrote Chesky in a recent statement on the companies’ blog.

The company most recently raised US$1.5 billion in funding in June with an accompanying valuation of US$25.5 billion, led by influential Chinese investors China Broadband Capital and Sequoia China , according to recode.net.

Airbnb’s Chinese rival is also catching up with the competition. Earlier this month, Tujia CEO, Luo Jun, announced over social media on Sina Weibo that Tujia successfully closed US$300 million in additional funding. This round of funding values Tujia at more than US$1 billion and was led by All-Stars Investment Ltd ( one of the funds behind Xiaomi), Didi Kuadi Joint Co., and the Ascott Ltd.

With the new influx of capital, Luo told Sohu finance that Tujia intends to launch a consumer service to fulfill market demand. . This customer-to-customer sharing platform will be similar in form to Airbnb. Tuijia will collaborate with organizations which run non-traditional hotels to further expand the service.

Tujia also has global ambitions. The company has vacation homes in Bali, Phuket and Tokyo set up to serve outbound Chinese travelers. The Wall Street Journal reported that the company plans to set up branches in Thailand and Taiwan in the next six months.

No Comments Yet

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

 

© 2019 All Tech Asia. All Rights Reserved.

AllTechAsia is a startup media platform dedicated to providing the hottest news, data service and analysis on the tech and startup scene of Asian markets in English.
Contact us: info@alltechasia.com

About Us

FOLLOW US ON

Subscribe to Our Newsletter