(Chinese Version)

Since the beginning of September, Airbnb has entered into business partnership with three first-tier cities in China, including Chongqing, Shenzhen and Shanghai. Every indicator shows that competition for market share between Airbnb and other major Chinese short-term rental platforms is ratcheting.

For people in the internet circle, they can’t be more familiar with the concept “sharing economy”, while Airbnb and Uber are two of the most representative “sharing economy” startups abroad.

However, different from Uber, Airbnb seems to disappear after partnering with Sequoia China and China Broadband Capital in 2015 and entering the Chinese short-term rental market. Airbnb’s Chinese counterparts, however, seem to be desperately expanding their market share.

• Tujia.com was launched in 2012. Similar platforms like Zhubaijia.com, Muniao.com and Xiaozhu.com were launched in 2012.
• After the wave of mergers (between Youku and Tudou, Meituan and Dianping, Didi and UberChina, etc), Tujia.com is also trying to expand its market share through merger and acquisition.
• This June, Tujia.com and Mayi.com entered into a strategic agreement. According to the agreement, Mayi.com would become a full-asset subsidiary of Mayi.com, but would maintain its brand, operation, core team structure and run independently.
• On October, 20th, Tujia.com announced that it had entered into a strategic agreement with Ctrip and Qunar and acquired short-term rental business from them.

In other words, short-term rental channels on Ctrip and Qunar will both become traffic entries for Tujia. As a matter of fact, Luo Jun, founder and CEO of Tujia, already indicated during MIIC 2016, co-held by TMTpost and Business Value magazine that

“Suppose sharing economy market is like a football game: during the first half, everybody is exploring new models and potentials; however, now we’ve reached mid of the game, and everybody is busy expanding scale and further exploring the market.”

Indeed, Tujia has been actively expanding its scale for a long time. Public records suggest that Tujia’s service has already covered 133 destinations abroad and 255 destinations at home, with over 310,000 listings available in total.

However, Tujia, valued at merely around $1 billion, pales in comparison to Airbnb, whose valuation has already reached $20 billion.

As the “father” of first short-term rental platform, Airbnb focuses much of its attention on global market. Not only its valuation, but also its market share and popularity all surpass its Chinese counterparts.

Yet, Airbnb didn’t enter the Chinese market until 2015 when its Chinese counterparts have already been thriving. Nevertheless, it seems that Airbnb won’t ignore a market with the largest population in the world.

On September 1st, Airbnb signed a cooperation agreement with and Invest Shenzhen, an organization assigned by the Shenzhen municipal government with the task of attracting investment, making Shenzhen the first city in mainland China to partner with Airbnb. Under the agreement, Airbnb will promote the development of the tourism industry of Shenzhen through its own platform, allowing its users worldwide to learn about the city's high-quality tourism and accommodation options as well as contributing to extensive exchanges between users from different countries and different cultural backgrounds.

During the World Tourism Cities Federation Xiangshan Summit 2016 (held from September, 19th to 21st), Airbnb signed a strategic cooperation MEMO with the Bureau of Tourism of Chongqing municipal government. One of items included in the MEMO is to allow Airbnb to promote the premium tourism resources and accommodation resources to the global users with its own platform, and to conduct the training with respect to Chongqing homestay owner’s reception.

On October 26th, Airbnb signed a memorandum of strategic cooperation with the World Expo Administration of China (Shanghai) Free Trade Zone. Based on the memorandum, Airbnb will promote the city's Pudong district, a symbol of China’s openness to the world. By introducing the traditional culture of Shanghai on an internationalized platform and relying on local resources, Airbnb will enhance the communication between Shanghai and other countries.

According to media report, the last time we heard from Airbnb’s marketing policy dated back to Rio Olympics. As official partner of Rio Olympics, Airbnb won the bid to provide at least 20,000 rooms for Rio Olympics. After signing cooperation agreement with three Chinese cities, Airbnb finally makes a firm step in China.

However, many analysts aren’t optimistic about Airbnb’s future in China.

“There’s zero possibility Airbnb could succeed in China,” Kaifu Lee once said publicly, “there’s huge cultural difference between the Chinese and American market, while all Airbnb is doing is trying to keep Chinese tourists using an overseas version of Airbnb.”

Indeed, different cultures have different understandings accommodation. Airbnb is born in the West, so it might encounter all types of challenges from government regulations, consumption habit to credit system, etc. Airbnb’s Chinese counterparts have the natural advantage in terms of understanding of the needs of the Chinese consumers.

Moreover, the concept “Chinese characteristics” is very popular in the Chinese market. In order to continue to develop in China, foreign enterprises have to better know Chinese infrastructure and figure out a business model that fits the Chinese market best.

When Didi merged UberChina, many pundits believed that they both represent “false sharing economy”, since fundamentally they compete with each other through their resources. However, after Airbnb entered the Chinese market, it didn’t carry out much marketing activity and always kept a low profile. But how could a company with a valuation of over $20 billion forget a market as large as China?

My widest guess is that: Airbnb has been trying to carefully understand the Chinese culture and policy environment since it entered China, but the day might come sooner or later when it stops behaving so carefully and makes some real big moves.

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[The article is published and edited with authorization from the author @Zhang Lin please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.