Why Airbnb has a chance in China – Jeffrey Towson

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Jeffrey Towson

China’s markets are littered with failures by US firms, but Airbnb might actually have a chance, says Beida business professor Jeffrey Towson in the Guardian. Domestic competition is not strong, and Airbnb has opportunities in international travel by Chinese.

The Guardian:

The home-sharing market in China is still in its infancy, so, although Airbnb only has 80,000 listings there so far, its domestic competitors are not that far ahead. Xiaozhu, its most direct equivalent, has more than 100,000 listings, while Tujia, which is more of a holiday rental site and oversees the management of its properties, claims to have 450,000 listings.

“It doesn’t strike me that anybody’s got this market yet. It looks like an open playing field,” says Jeffrey Towson, a professor of investment at Peking University’s Guanghua School of Management. By comparison, he says, when Uber entered China, its domestic competitors, Didi and Kuaidi, were firmly established. After a costly battle, Uber was forced to bow out.

Airbnb’s other advantage is its global platform. As more young Chinese travel abroad and stay in Airbnb properties, the more likely they are to use it when they go home.

“[Airbnb] should try to dominate outbound Chinese tourism immediately,” Towson says, putting the number of these trips at around 110m a year. “Go after all of them. The Chinese competitors, are they going to start finding listings in Brazil? They can’t do that.”

More in the Guardian.

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