Airbnb says China will become largest source of business by 2020
Many Western companies have found China to be a difficult market to crack, and home-sharing giant Airbnb is no exception.
“Frankly, we weren’t sure [Airbnb’s model] was going to work here,” said Airbnb co-founder and chief strategy officer Nathan Blecharczyk at Fortune’s Brainstorm Tech International Conference in Guangzhou, China on Tuesday. “We had heard the stories about other tech companies and how hard it is to succeed in China, and so we weren’t sure whether to make it a priority or focus on other things that were more straightforward.”
After a year of contemplation, Airbnb decided to make the leap and give it a go in China. But since launching its Chinese arm three years ago, Airbnb has faced fierce competition from local rivals and encountered discoverability issues related to government censorship of websites like Google, Facebook, and Twitter.
Airbnb began building relationships with the government and built a 60-person product team in Beijing. Once the company began “localizing” the product, it saw an almost immediate lift in bookings.
It also integrated Alipay, Alibaba’s online payment platform, into the Airbnb platform. Today, more than half of Airbnb China’s bookings are paid via Alipay.
These additions have led to some pretty impressive growth. To date, approximately 8.6 million Chinese guests use Airbnb when traveling abroad. Inside of China, there are about 120,000 homes listed on the Airbnb platform. Three years ago, that number was only 10,000.
Airbnb will continue investing heavily in the market to ensure that growth continues. Blecharczyk said the company is currently building a local customer service center and plans to triple its 60-person product team in the new year. Airbnb also recently announced it will invest USD 2 million through 2020 to support “innovative tourism projects” throughout the region. Airbnb has previously said that China is projected to be its largest origin market by 2020.
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