Airbnb Doubles Down In China, Where Uber Failed

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airbnb ceo brian chesky china shanghai

2016 was the year Uber got out of China. In 2017, Airbnb wants to prove it can thrive there.

On Wednesday in Shanghai, Airbnb Cofounder and CEO Brian Chesky announced that the $30 billion startup is taking steps to grow its home sharing business in China—promising to triple the size of its local workforce (currently at 60 employees) and double its investment in the country. Airbnb is also debuting its latest "Trips" feature in Shanghai and is changing its name in China to "Aibiying" (爱彼迎), which the company says translates to "welcome each other with love."

Like nearly every other Silicon Valley-based tech firm before it, Airbnb is making a strategic bet on the size and wealth of the Chinese population. Airbnb says outbound travel from China to its listings in other countries grew 500% in 2015 and 142% in 2016, and Chinese travelers have stayed in Airbnb-booked homes more than 5.3 million times since the company’s founding. Inside China, Airbnb says it has about 80,000 listings and nearly 1.6 million cumulative guest arrivals. More than 80% of Airbnb users in China are under the age of 35, a higher proportion than any other country.

“There’s a whole new generation of Chinese travelers who want to see the world in a different way,” said Chesky. “We hope that Aibiying and our Trips product strikes a chord with them and inspires them to want to travel in a way that opens doors to new people, communities and neighborhoods across the world. I’m really excited about our future here.”

Airbnb has an uphill battle in China. While the company has many listings around the world and especially Asia, it lags behind the domestic market leader, Tujia, which claims more than 450,000 listings in China and an important partnership with travel giant Ctrip. At the end of 2016, Airbnb reportedly was in talks to acquire another competitor, Xiaozhu, with 100,000 listings. Integrations with popular payment service Alipay and dominant social network WeChat are a good start though.

Meanwhile, Airbnb will have to convince skeptical Chinese regulators to accept and embrace another American tech firm, something Uber struggled with from the beginning. The strategy is to partner with cities, which Airbnb has had mixed success with in the U.S., where it has ended up in legal battles with major markets like San Francisco and New York. So far, the company has signed memorandums of understanding with Shanghai, Shenzhen, Chongqing, and Guangzhou. Last October, Airbnb split its Chinese operations into its own separate subsidiary, Airbnb China, a structure that could allow it to operate more freely (and another move previously taken by Uber).

One hurdle Airbnb and its competitors have yet to overcome is the trust factor: convincing Chinese travelers to stay in strangers’ homes and Chinese homeowners to let strangers in. That’s been a challenge for Airbnb since its inception, but China presents additional social and cultural barriers.

Airbnb will hope to make a splash with its "Trips" product, launched late last year and now coming to China for the first time. In Shanghai, travelers will be able to book experiences, like a behind-the-scenes opera tour, that are supposed to be different from the standard tourist attractions. Airbnb also made the feature availalbe in India, starting in Dehli, this week.

Brian Solomon covers technology and the on-demand economy for Forbes. Follow him on Twitter, Facebook and LinkedIn.

This article was sourced from http://newsmakersatl.com