China’s Tujia to take on Airbnb in global market with new partnership in Japan

PUBLISHED : Tuesday, 22 August, 2017, 7:01pm
UPDATED : Tuesday, 22 August, 2017, 11:01pm

Tujia, Airbnb’s biggest competitor in China, has formed an alliance with a company owned by Japanese e-commerce giant Rakuten Group to better take on the US home-sharing giant on a global scale.

Beijing-based Tujia inked on Tuesday a partnership deal with Rakuten Lifull Stay, a Japanese vacation rental service company with 8 million properties, to further its expansion in Japan, a popular destination for China’s outbound travellers.

Under the agreement, Rakuten Lifull Stay and Tujia will share “resources”, giving Tujia’s Japanese listings a significant boost to 100,000 by 2020 and eventually to 200,000 by 2025. Airbnb reportedly has 52,000 listed properties in Japan .

“In terms of our expansion overseas, step one is to have more listed apartments. Step two is to offer more value-added services for China’s outbound travellers rather than just providing accommodation for them,” said Luo Jun, co-founder and chief executive officer of Tujia, adding that the company will actively look for more overseas partners to further its global expansion.

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The move comes at a critical time for Airbnb, which has been targeting Chinese outbound travellers for years. The US company pledged earlier this year to make further investments in China, including a plan to quadruple its engineering team in the country over the next 12 months, to focus on affluent Chinese millennials who are increasingly enjoying independent travel in China and abroad.

Despite being the world’s fourth largest start-up with a valuation of nearly US$30 billion, Airbnb is under siege in China when competing with mainland firms . Companies like Tujia and Xiaozhu have been expanding aggressively in the country with far more listed properties on their platforms and innovative features, such as smart locks and apartment cleaning, to meet the demands of Chinese hosts and travellers.

Now, the likes of Tujia are gearing up to challenge Airbnb in markets outside China by targeting the rapidly growing number of Chinese outbound travellers to popular destinations in Japan, Southeast Asia and South Korea.

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Tujia said its business in Japan has grown eight times in one year after it set up a small team there in 2016, without providing further details. The company, which has made a string of acquisitions in China, including low-cost home-sharing platform Mayi, is betting big on Japan’s market as the country has already approved home sharing as a legitimate service.

Luo didn’t elaborate on whether the company will use acquisitions for overseas expansion, but he said the company is “not lacking money”.

Tujia hasn’t completed any fund raising fund since 2015. It was valued at more than US$1 billion after a US$300 million funding round in 2015.