Even as COVID-19 rampages across the world and takes a toll on global tourism and road travel, Zuzuche continues to grow its business and even manages to secure funding for further expansion when many rivals have been knocked out of the market
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Zuzuche (Chinese: 租租车), China’s one of the largest car rental platform targeting both the domestic and international markets, recently raised tens of millions of USD in a Series D funding round from undisclosed investors.
The firm, founded in Guangzhou, capital of southern China’s Guangdong Province, in 2011, provides services including, among others, international and domestic car rental, car insurance, international driver’s license translation, global attraction tickets and tourist SIM cards.
According to a company statement, the fund raised from this round will be used to develop products and services, apply digital technology on a wider scale, expand deeper into the domestic market and hire more talent for global operations.
Li Bin, the co-founder of Zuzuche, told EqualOcean in an exclusive interview that investors chose to inject money into this platform even as COVID-19 still rages across the world, prompting lockdowns and battering international tourism. Victims include road trips, a new favorite among China’s emerging middle-class consumers.
Against this backdrop, short-distance journey has become the norm, with road trips gaining increasing popularity among safety-conscious travelers, said Li.
“The epidemic has greatly accelerated the market education process, leading to higher levels of acceptance and recognition of car travel among the wider populations," Li told EqualOcean. "The most notable manifestation is that users have a shorter travel radius.”
The entrepreneur also explained that since the duration of car rental is getting longer amid the pandemic, the company has reported higher repurchase rate and units per transaction (UPT).
To date, Zuzuche has built a supply chain network covering more than 200 countries and regions, with millions of cars in supply.
Meanwhile, Zuzuche operates in 31 provinces and 600 cities across China. It hosts close to 3,000 car rental companies and premium service providers on its platform and has upwards of 20,000 partner stores.
Zuzuche’s domestic compound growth rate shot up to 470% from Q4 2019 to Q1 2022. Li credited the company’s “unique” business model for this spike in consumer demand for its services.
Li said the company’s proprietary SaaS system has made it easier to integrate supplier, user and partner resources. This also allows it to provide tailor-made customer services and deal with user requests on a case-by-case basis, boosting the user retention rate.
Even as curbs on China’s outbound tourism are still in place, dampening the company’s revenue from international car rental, Li remains upbeat about the prospects of the global market.
Describing global car rental as a market worth “hundreds of billions of USD” and “with immeasurable potential,” Li said that contrary to popular expectations, Zuzuche's overseas business has gained a bigger space for growth.
“Peer competition is gradually waning,” said Li, referring to the reduction in numbers of competitors who have folded due to pandemic-led economic woes.
Li’s firm is one of the first domestic players to tap into global car rental. Within a year of its launch of the international business in 2017, Zuzuche had logged 5 million users. Through a data-driven operation model, he said business volume held steady even during the height of the pandemic in 2020, and has further grown at 60% to 100% every year over the past two years.
As many countries reopen and loosen travel restrictions, the startup’s international business turnover has rebounded at a faster clip, and by Q1 2022, its overall revenue from this sector has tripled that of the pre-pandemic levels in 2019.
Nowadays, the market is still relatively competitive, but as a newcomer, Zuzuche believes that there is still a lot of room to explore the market, especially in the post-epidemic era when the market is changing and consumer demand is being released. He remains confident that Zuzuche can gain a better market share with the world-leading operational efficiency of China's Internet firms.