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New action of Xiaozhu short rent

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May 30, 2019 07:46 pm ·

Xiaozhu Taps into Evolving Home-sharing Market

China’s one of biggest home-sharing startups Xiaozhu decided to further expand its business model from pure platform to one-stop accommodation platform in its latest move as China's tourism and accommodation market changing rapidly, the company announced on May 17. Xiaozhu has 800,000 listings globally, covering 700 cities and regions all over the world. The company is the first platform that equips smart locks for landlords, signaling the company’s efforts in supply-side and processes standardization. “We’ve already been exploring providing all kinds of accommodation services in the past, from photo shooting, cleaning to equipping smart locks for landlords, beyond a single platform. Until now, we came up with the decision that we need to find a pillar to support more than transactions. That’s why we launched a second operation center in Chengdu to start trials of self-operation, franchise business, and off-line service station,” Xiaozhu’s CEO and founder CHEN Chi (陈驰) claimed during an interview with Chinese business review media 21 CBR. The company aims to build a featured accommodation ecosystem in the coming years. This strategy is becoming an essential problem that all entrepreneurs need to address, as CHEN claimed.   Xiaozhu took the initiative, a one-stop short-term leasing solution for landlords called Lanzu Community, to lower the barrier for landlords to enter the market in 2018. The company takes care of everything involved in leasing from home design, furnishing, IoT devices, and smart management. Xiao started strategic cooperation with Hainan Travelling development committee to provide services in Hainan’s rural area, launch poverty pivot programs and set up homestay industry institutions, in 2018. Aside from expanding into all kinds of properties, Xiaozhu also partners with rural homestay and accommodations booking service platforms like Huazhu and Yunzhanggui. “You need to solve the environment problem and accommodate with laws in villages, on the other hand, you need to consider the elderlies in communities and city rebuild plan. You cannot have them done as a platform, ” CHEN said. Over 6,000 Xiaozhu-managers provide landlords cleaning service in 2019. In April, the monthly average orders peaked at 250,000, proving the service itself generates value. In a bid to build a one-stop accommodation service platform, the company focuses on the supply side. In consumer side, it plans to develop airport transfer and luggage delivery in some pilot cities like Shanghai, Chongqing, Chengdu, Xi’an, according to Xiaozhu's Chief Operating Officer WANG Liantao (Tarry Wang, 王连涛). The company sets to apply the strategy in reality with more third-parties involved. Xiaozhu will be in charge, and others will join the ecosystem connected by a cooperation network to provide services. Xiaozhu is not the sole company which tries to invest in a heavy business. OYO Hotel, a rapidly expanding Indian hotel company, completed its business transition as it announced in February. It initially partnered with manager-owners in a soft brand arrangement. Now it wholly leases and franchises all of its budget hotel properties. The company differentiates itself from traditional franchising in traffic entrance, technology and its focus on budget hotel. Most of its customers book rooms from its app and it also has a back-end reservation management system to improve efficiencies of various process that hotel booking involves.

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Feb 9, 2019 06:49 pm ·

A Scorecard Breaking Down Everyone from Xiaozhu, Tujia to Airbnb

Airbnb, the innovator of home-sharing, is about to go public in 2019 and it was profitable for a second consecutive year on an adjusted basis. The company expects to hit 500 million guest arrivals by the end of Q1, up 100 million since September. The company was reportedly valued at USD 31 billion during its last round of funding in March 2017. Airbnb seems unsurpassable, but the story is different in China. We’ve talked about its journey in China and here is a scoreboard for everyone in China’s home-sharing market, from Xiaozhu, Tujia to Airbnb China or Aibiying. Euromonitor data shows Airbnb held only 8.7% of the China market in 2017, compared to 41% for Tujia and 23% for Xiaozhu. Listings echoed the readings, Tujia has 1 million listings as of August 2018, Xiaozhu and Airbnb have about half a million, 175,000, respectively. Business Models at A Glance Founded in 2011, Tujia has always been mentioned as China’s Airbnb, which connects property owners with travelers looking for alternatives to hotels. Tujia, however, started from renting out vacation properties that were essentially mini-hotels, fully run by Tujia staff. The company often buys on vacant units in apartment building, hotels and other inventories, and provides services from property management and inspections of listings to cleanups after guests leave. Tujia is more like a B2C business other than C2C, operating in a heavy-asset model and reducing vacancy rate for China’s real estate developer. Sometimes it’s not that cool or unique compared to hotels even it is moving on to be a C2C platform after the company completed its series D round of funding in 2015. Under such business model, the company can cope with a general lack of trust among Chinese consumers. The company doesn’t expect to break even until the end of 2019 but once said it could pursue an IPO as soon as 2019. Tujia has close connections with government officials and people working with police departments, local and federal governments. Xiaozhu.com aims at down-market, offering much lower price point than that of Airbnb and Tujia. Airbnb targets at high-end accommodations, emphasizing quality over quantity. According to Nathan Blecharczyk, chairman of Airbnb China, they want to make sure the quality of the product in China is of equal quality to that globally. To fit in China, the company introduced Alipay, Zhima Credit and Wechat on its platform (see more in this article). It is common for Tujia and Xiaozhu expanded into value-added services to drive profits and beat the competition, Airbnb, however, emphasizes more on landlords training and government relationships, which is partly a lesson from its overseas experiences. In the third quarter of 2018, the number of guest arrivals of Airbnb China increased by 91% in Beijing. Backers and Advantages Tujia raised USD 300 million in October 2017 and is backed by the Chinese largest travel operator Ctrip.com International. At the time it claimed to have about 650,000 listing on its platform. In 2018, the number grew to one million. Tujia acquired Mayi.com, a smaller rival compared to Xiaozhu in 2016, and the homestay businesses of both Ctrip and Qunar in 2017. The company also has forayed into the overseas market like Japan. This series of movements are huge investments. Xiaozhu received USD 300 million in series F round of funding led by Advantech Captial and Alibaba’s Yunfeng Captial. The company is working on AI devices with Alibaba, one of its backer (see more in this article). Its latest big data report shows a sinking trend for many Tier 3 and Tier 4 cities are listed in the most popular fifty cities including Leshan, Liangshan, Zhangjiajie, which are well-known sightseeing locations in China (see more in this article). Airbnb China’s advantage lies on overseas even the company spend the most investment in China than any other districts it operating. Airbnb has 5 million listings worldwide, and it is an overwhelming number that beats all the contenders. The company chose slow and steadiness, aiming to be an outbound travel solution provide for Chinese consumers. The mission of Airbnb China is more like connections, not scale and expansion by burning money and beating competitors, instead. "I actually think our success domestically is a little bit of a race to educate the market and build the relationships that will hopefully blossom into an outbound travel," said Nathan Blecharczyk in an interview with GGV Capital in April 2018, one of its backer.

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Feb 7, 2019 06:46 pm ·

Airbnb to Win in China's Home-sharing Market

Jan 15, Airbnb announced its second straight year of profitability on an adjusted basis, said in a memo that it generated earnings before interest, tax, depreciation and amortization in 2018, without an exact figure. As one of the companies ready to go public in 2019, Airbnb has posted USD 100 million in profit on USD 2.6 billion in revenue in 2017. The company values USD 38 billion, up from USD 31 billion in 2017. Revenue from Airbnb’s China division is expected to climb by more than half to roughly USD 130 million in 2018, representing 4% to 5% of the company’s overall revenue. On the other hand, the company expected to lose a manageable USD 20 million from its China business overall last year, reported by The information. Winning in China Many would say foreign giants just cannot beat local equivalent in China, and look at how Uber burned 2 billion and ended up exiting in 2016 in exchange for 17.7% share in DiDi, which is valued at USD 56 billion now. It’s a deal worth more than USD 9 billion. Airbnb witnessed chance in China’s home-sharing market in mid-2014 and started building the team in mid-2015, and the branch has 150 employees, 60 of which are working on the product, 40 are hosting community operations, others are in charge in marketing team, public policy and so on. Airbnb China is the only product team outside of the U.S. At the end of 2016, the separate entity has about 30 employees and plans to increase the amount to 300 staffs in two years, a little bit aggressive plan compared to situations nowadays. Baffling & Fitting in Airbnb has been struggling to find a suitable person to be chairman for this worth-invested region once, who needed to have international experience, knows local markets and would not balk at reporting to bosses in far-off San Francisco. July 2018, PENG Tao (彭涛) was named as president of Airbnb China. Nathan Blecharczyk was appointed as chairman of Airbnb China in Oct 2017, also Airbnb’s co-founder and chief strategy officer. Lack of autonomy, one of the reasons baffling former Airbnb China head GE Hong (葛宏), is just the other side of a coin because for Airbnb, doing business in China is never separated with its main business. The company saw some users booking a room via Airbnb and listing their personal room when they finish the trip. It happens in China, too. More importantly, the California-based home sharing giant can justify their expenses and costs based on outbound revenues, which their Chinese contenders cannot compete for it. Euromonitor says Airbnb generated USD 1.8 billion in retail value RSP (Retail Selling Price) – a common tourism industry sales metric - in the Asia Pacific in 2017, reported by Business Times. Starting from zero and urging to fit in China, Airbnb China, or “Aibiying” , one that translates as “welcome each other with love,”  abandoned Facebook and Google service, chose to work closely with Tencent and Alibaba, allow users to log in through their WeChat account and pay with Alipay. Zhima Credit, a credit scoring product provided by Alibaba, improves trust and safety. As soon as the company added Alipay, their business increased 15% overnight,  according to Nathan Blecharczyk in an interview with GGV Capital in April 2018, one of its backer. Airbnb also worked on promoting Guilin, a southern city in China, to the whole world with local officials. March 2018, Airbnb notified their Chinese landlords that the company was allowed to provide their information for Chinese government without further notifications. Balk at Acquisition Rumors have told Airbnb had talks with Tujia and Xiaozhu for  possible acquisitions, which turned out failing. In the Tujia case, Airbnb would have owned 70 to 80 percent of the China business, with Tujia owning the rest. Tujia admired Airbnb’s resource outside China which could distinguish it from others. In Xiaozhu case, CHEN Chi (陈驰), the cofounder and CEO of Xiaozhu, said the two companies did have talks on business development and technological cooperation but never moved to capital cooperation, in an interview with Tech Node. Founded in 2011, Xiaozhu secured USD 300 million from Alibaba Group-backed Yunfeng Fund, CHEN Chi indicated that even the short-term rental industry has been accelerating, but the company still facing fierce competition from hotels in the interview. A spokeswoman for Xiaozhu said it expects its transaction value to increase by 280% in 2018 to more than USD 1 billion. Tujia is now valued at USD 1.5 billion after its series E round funding of USD 300 million led by Ctrip in Oct 2017. According to Bloomberg, Tujia generated less than USD 2 million revenue in the quarter ending in June 2016, and the value of transactions through the site reached USD 22 million during that same quarter thanks to about 1% of Tujia’s listings are occupied at any given moment. The company emphasizes on traffic and transaction number. Volume is utmost important whereas revenue is misleading.

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Feb 3, 2019 08:08 pm ·

Xiaozhu Rolls Out Facial Recognition-Enabled Smart Lock across China

At the end of 2018, Xiaozhu (小猪短租) worked closely with Hangzhou Police department and rolled out facial recognition-enabled smart lock in Hangzhou. Soon it expanded to another 40+ cities across China such as Shanghai, Wuhan, Tianjin, Chengdu, Chongqing, and Guangzhou etc, In July last year, Xiaozhu announced cooperation program with the Internet Finance Authentication Alliance (IFAA), an alliance aiming at creating a verification technology ecosystem, to upgrade smart locks to enhance securities and achieve “smart check-in”. After the faces been verified by the facial recognition-enabled smart lock, guests will receive Electric-code via phone to open the door and automatically complete self check-in process.  IFAA was founded in 2015 and its members include CAICT (中国信通院), Huawei (华为), ZTE (中兴), and Ant Financial (蚂蚁金服) etc. Its chairman FENG Chunpei (冯春培) serves as a senior director at Ant Financial. The key security technology that Xiaozhu used to upgrade its smart lock was provided by Ant Financial. Compared to the traditional non self check-in option where hosts need to physically be present in the room and open the door for guests, smart locks make check-in much more convenient especially for B&B stays in which hosts may not stay at home all the time which might cause difficulties in passing keys sections. For now, smart locker verifications take three forms which are passwords, fingerprints, or face-recognition. In the current Chinese home-sharing market, the most common smart lock type is the password lock which is relatively easy to set up compared to the other two. As in practice, house owners can simply send the enter passwords to guests. While for fingerprints, currently, it is not possible to add guests’ fingerprints to the lock before arrival.   For the facial recognition-enable smart lock, it has not yet become the mainstream mainly due to the immature of the 3D facial recognition technology and the high cost to set up. One obvious advantage for this type of smart lock is that it uses the biometric information; therefore, it saves users spending extra effort in memorizing the password. Another advantage could be that it makes sure the person will stay is the person who made the order and that person has no previous criminal record or unethical behaviors prohibited by Xiaozhu. Lastly, the accuracy and potential hacks are the concerns while implementing facial recognition-enabled smart lock. For example, it will cause frustrating experience for guests when the lock fails to identify them and a long time required for the technician staff to fix it before they can go into the room. Since this face recognition technology is still new thus it might be vulnerable to hacks.

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Jan 23, 2019 05:17 pm ·

Xiaozhu Releases its 2018 Home-sharing Service Big Data Report

Jan 15, 2019/EqualOcean- Xiaozhu (小猪短租), China’s answer to Airbnb, published its 2018 home-sharing service big data report on its official WeChat account. The report shows that needs for cleaning and photography service have enjoyed a stunning growth rate for the past year. Home-cleaning service orders reached 200 thousand in 2018, the number of cleaners surpassed 6 thousand. Trends of smart equipment to enhance security or just for leisure among middle to high-end listings on the Xiaozhu APP sprung up, Xiaozhu’s data indicates. Refurnishing and landlord mall are becoming a new growth momentum for Xiaozhu. Road trip and home-stay experience lured many companies for team building. In Beijing, home-stay experience in suburban districts grew 83% compared to 2017, the highest one among other main cities, Chengdu was the second with a 60% growth rate. Landlords from Beijing also emphasized more on smart furniture than any other cities. Data from Xiaozhu also pointed out a sinking trend (下沉, a new concept refers to consumption seeping into the “lower-tiered” cities in China) is happening in the current China society. Pinduoduo (NASDAQ: PDD, 拼多多), a threaten to Taobao, focusing on group deals and incentivizing customers with discounts if they invite friends to buy alongside them, is a representative of the trend. Xiaozhu saw many Tier 3 and Tier 4 cities are listed in the most popular fifty cities including Leshan, Liangshan, Zhangjiajie, which are well-known sightseeing locations in China. It seems that value-added service, smart equipment and sinking are the new sexy in home-sharing industry. Dec 25, 2018, Xiaozhu announced it rolled out a series of practices and adoptions to address safety issues like facial recognition-enabled smart locks (see this article). The number of people using Online home-sharing app has reached 147 million as of 2018 in China according to a report conducted by iiMedia Research. Xiaozhu has 35 million active users as of September 2018. Airbnb did not disclose its users number in China, but AN li (安丽), the VP and Head of Public Policy of Airbnb China, shared some useful numbers in a conference: the company generated more than CNY 6.2 billion ( USD 930 million) economic value in China in 2017, and Airbnb China saw a 125% growth of listings compared to the same period in last year. In 2017, Airbnb has 175,000 active listings according to Airbnb’s co-founder and chief strategy officer Nathan Blecharczyk in an interview with GGV Capital in April 2018, one of its backer.

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Dec 27, 2018 05:57 pm ·

China's Airbnb Xiaozhu to Test Facial Recognition-enabled Smart Lock and Blacklisting

Dec 25, Xiaozhu(小猪短租)announced it rolled out a series of practices and adoptions to address safety issues including facial recognition-enabled smart locks to verify users' identification, burglar alarms and public safety education for landlords, etc. in the southwest Chinese city of Chengdu, reported by iResearch. Xiaozhu is also set to establish a blacklist of tenants who misbehave during their stay at hosts' homes and aims to push players in the industry involved in it as well. Tujia(途家), Xiaozhu's local rivalry, is the first one to adopt the blacklist system cooperated with Ablibaba's spinoff Zhima Credit(芝麻信用) in March. Last month, Home-sharing Service Standards published by State Information Centre urges the system. More than ten landlords or “managers” has been detained for running short-term home rentals in China mainly for illegal “rent in order to sub-rent”, reported by 36Kr. Airbnb threw out Airbnb Host Academy in China to provide curriculum for landlords in Feb 2018, helping them elevating reputations and getting spotlights in the Airbnb website to attract more visitors. Airbnb had always played as a platform connecting users and houses, it was the first time the company considered connecting landlords for its competitors in China were aggressively underscoring the importance of management. For instance, Tujia utilizes standardized sub-rent business model, a short-term version of Ziroom(自如) and Xiangyu(相寓), Xiaozhu was exploring authentication, unified cleaning services. March, Airbnb notified their Chinese landlords that the company was allowed to provide their information for Chinese government without further notifications, reported by Ping West. Clearly, the booming of short-term and long-term home sharing market posts a challenge to the Chinese authorities, which want to keep an eye on the flow of citizens, public security and communal harmony. Japan, issued a first lodging law for short-term home rental in Asia to limit home-sharing to 180 days a year to restrain in April. In U.S., New York City, Santa Monica and California all have respective alike banns on local short-term rentals. As AI technology developing and expanding, it might open a new door for players in the industry for security management, a pain point concerning tenants, landlords and governments. --Author: LinYan. Write to LinYan at LinYan@EqualOcean.com.

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Nov 18, 2018 09:57 pm ·

The Fiercely Burgeoning Home-Sharing Market in China is Under Control

State Information Centre (国家信息中心) issued a standard featuring home-share market on Nov 15, along with Xiaozhu (小猪短租), Tujia (途家)and Airbnb, etc. The  Home-sharing service criterion is drafted by GU Huimin (谷慧敏), the president of Administration Academy of Beijing International Studies University, and set after combining with delegates' opinion from the industry and in cooperation with accommodation providers. The authorities formulate the standards in the aspects of urban accommodation community relationship, personal information verification, accommodation source investigation,  sanitation service, personal information protection, blacklist sharing and smart safety equipment usage. It is the first time that three parties including platform, host and tenant, are all under the standard’s control, which also fits in rural area and urban.  Nowadays home-sharing industry is now penetrating third-and fourth-tier cities and rural areas, which is now seen as the key to rural economic growth and poverty alleviation. Xiaozhu data showed homestay bookings related to third-and fourth-tier cities and rural areas increased the most in the first half of this year. Xiaozhu has 35 million active users and global listings exceeding 420,000 units across 400 Chinese cities and some 250 overseas destinations as of Sep 2018, the six-year-old startup secured USD 300 million On Oct 10 led by Alibaba Group-backed Yunfeng Fund(云峰基金). Other investors include Chinese innovation-driven Advantech Capital(尚珹资本), Government of Singapore Investment Corp (GIC), Joy Capital(愉悦资本), Morningside Venture Capital(晨兴资本)and Capital Today(今日资本). Xiaozhu is building its service system to lay a foundation for further development and expect me people could become participants and beneficiaries of the sharing economy. The company is facing fierce competition with Airbnb, and other domestic players such as Tujia in China.  The home-sharing industry now in China is just showing a tip of the iceberg, According to a SIC report, the market for home-sharing services is expanding rapidly in the country. In 2017, the country's home-sharing market earned CNY 14.5 billion( USD 2.2 billion)  in revenues, up 70.6% year-on-year . However, the market is comparatively young just like any other branches of sharing economy. Standards are needed to control and slow down the pace of heading out. We cannot emphasize enough the importance of safety and sanitation towards the industry where customers are using service provided by person but not a hotel, especially home-sharing in rural areas has huge growth potential, based on more younger customers are pursuing uniqueness and willing to explore remote areas.  ——Author: LinYan. Write to LinYan at LinYan@EqualOcean.com

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