Airbnb is making a big push in China. From December 7th a new legal entity (Airbnb China) will cater to all those neglected hosts and guests.
To satisfy Chinese regulators the unit will store their data on local servers. The firm has also struck new agreements with the governments of Shanghai, Shenzhen, Chongqing and Guangzhou, which suggests that these big cities welcome its formal arrival.
In addition to these developments, there are rumours that Airbnb is about to take over Xiaozhu, a mid-sized local rival that recently raised USD 65 million of venture funding.
Airbnb sees its rivals in China as parochial outfits. None of them have a global network or the means to build one, says Nick Papas, the firm’s spokesman in Washington, DC.
But the strongest Chinese player Tujia is valued at more than USD 1 billion and offers some 440,000 homes in over 300 cities. Unlike Airbnb’s model, Tujia helps developers let out vacant properties—taking advantage of China’s property glut—and also offers services to potential buyers of homes.
“The past decade has shown that it’s very hard for American companies to use their own approach to do business in China,” says Chen Chi, Xiaozhu’s CEO.
A combined firm would still have to contend with regulatory confusion. Tujia’s boss, Luo Jun, laments that there is “no clear national law supervising this industry.”
Airbnb may have inked deals with four Chinese cities, but Tujia has made over 200 agreements with local authorities across the country.
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