Airbnb’s major Chinese rival Tujia has raised $300M in fresh round of funding, which was led by online travel giant Ctrip. Other high profile investors like All-Stars Investment, Glade Brook, G Street Capital & others also participated in the round. With the latest funding, Tujia’s valuation has zoomed up to approximately $1.5 billion.
Tujia’s CEO Luo Jun said that the money raised will be used to further improve customer experience by enhancing the quality of some critical elements – for instance linen washing, cleanliness etc. The company will also use fresh funds to invest in domestic as well as international real estate market.
Tujia along with another Chinese company Xiaozhu dominate the domestic accommodation market. Understandably, both companies are major deterrent to Airbnb’s ambition to emerge as a top player in China’s lucrative tourism market.
The American based Airbnb, which is one of the most valued startups, announced this year to sharpen its focus on the Chinese market. The company had unveiled slew of new measures on this front, including tripling its workforce in China and starting a new tour program for Shanghai city. Airbnb also christened a new Chinese name ‘Aibiying’ in order to lure local consumers.
But industry experts believe that it won’t be easy for Airbnb to crack the Chinese market, especially since Tujia and Xiaozhu have already made deep inroads. The impressive numbers put forward by Tujia reflects company’s command over the local market. The firm claims that it has recorded 180 million downloads till date and claims to cover 345 destinations across the country.
Experts cautious view on Airbnb appears partly justified, especially if we take into account how last year deep pocketed Uber was forced to exit China owing to unsustainable competition from the local player Didi Chuxing.