Airbnb’s Chinese rival is doing big things

Tujia is now valued at $1.5B, while Airbnb struggles to win over Chinese consumers.

October 11, 2017

Tujia, often described as the “Airbnb of China,” has just raised a $300m round, placing its valuation at $1.5B. The company will use its new funds to launch a domestic and global expansion effort.

To date, Tujia has accrued 180m downloads and 650k listings in 345 destinations across China, crushing Airbnb’s 100k China listings.

The site’s growth doesn’t bode well for Airbnb, which, in recent years, has quadrupled its tech team in Asia, and launched a manic, mildly unsuccessful effort to convince Chinese people to use their service.

What is Tujia, again?

The company was founded in 2011 by Melissa Yang, an ex-Microsoft employee who previously started and sold a vacation rental software company to Airbnb rival, HomeAway, for $10m.

Tujia grew quickly and was a certified tech unicorn ($1B valuation) by 2015.

Despite the Airbnb comparisons, Yang has insisted her company is “not copying anyone’s business model.” Many residents in China don’t have any extra room in their dwellings, so the service focuses on the country’s 50m vacant rental units instead of home sharing.

They are a lot more hands-on than Airbnb, partnering with an entourage of developers, cleaning services, and property groups to help owners manage their listings.

Airbnb kinda doesn’t jive with Chinese culture

Chesky’s company rolled into China with a bang in 2015 but has been pretty slow getting the hang of things.

Aside from struggling to adjust to China’s different set of cultural norms re: sharing homes with strangers, Chinese consumers have also been critical of Airbnb’s recent effort to rename itself “Aibiying” (translation: “welcome each other with love”) in China — which convinced Chinese people it was either a brothel or a hippie commune.

It’s pretty hard to penetrate China

The fast-growing country is a holy grail for American tech companies looking to expand their markets. But the yanks have been met with a lot of resistance.

Google has spent years trying to dismantle Baidu, Amazon can’t seem to top Alibaba, and Facebook (which is banned there) must watch from afar as WeChat controls the market.

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