Chinese Tujia Competes with Airbnb

The vacation rental service Tujia, the strong Chinese competitor to the American rental app Airbnb, has recently embarked on a journey to seek $300 million in funding. Coming head to head with Airbnb, Tujia's appeal is founded upon gaining the appeal of Chinese locals through offering other services like cleaning and inspection of rental homes. With 430,000 locations throughout China, compared to Airbnb's 80,000 locations, Tujia seems to be leading the way in the rental home business throughout China and beyond.

Founded by co-founders Melissa Yang and Leo Jun, Tujia was created in 2011 with the newfound use of empty properties that could be run by Tujia staff. Similar to Airbnb's service of connecting property owners to temporary buyers for rent, Tujia began to offer an alternative to staying in hotels with increased attention to a plethora of needs. Tujia, for example, allows users to sort listings for different conditions such as picking rental areas near medical facilities for patients, or rental areas that are near subway lines that offer travel attractions. While very similar to Airbnb, Yang has noted that the home-rental company Tujia "is not copying anyone's business model."

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This fact rings true, given that Tujia exercises a completely different focus on business than the American app Airbnb, a newcomer to the short-term home rental in China. Already different from Airbnb, Tujia primarily focuses on local Chinese travelers. President of Tujia.com International Ltd Zhuang Hai expanded on this, stating that Airbnb "only brings foreign travelers, so the booking density is much lower than domestic players like ourselves. Most of the [short-term rental] travel is going to come from domestic customers looking for domestic properties."

If Tujia can secure enough funding, their eyes will be set on Japan, a growing hub for short-term rentals given the recent interest of Chinese travelers. In addition, increased focus on southeast Asia and North Korea will be underway as well.

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While Tujia has been focused on gaining funding, Airbnb has dedicated themselves to distinguishing their services on the Chinese market with their recent release of the travel services feature Trips. The app allows the user to enhance their travel experience, with new features such as booking city tours and restaurant reservations. Airbnb CEO explained the importance of Trips, asserting his hopes that the feature "strikes a chord with [travelers] and inspires them to want to travel in a way that opens doors to new people, communities, and neighborhoods across the world.

Given that China's rental market for short-term housing is currently worth 8.8 billion yuan, and can reach 17 billion yuan by 2018, providing trusted rental home use is important. Along with the fact that China's spending is projected to be double of the U.S over the next ten years, services like Tujia and Airbnb will probably engage in raw competition for Chinese travelers over the next few years. While the two companies are very similar, as long as one company can cater the best services to local travelers on a consistent basis, the short-term rental business will never be the same in China.