Airbnb announced new strategic partners in China on Tuesday that it hopes will, as CEO Brian Chesky said in a statement, “create a truly localized platform.” But the company has also been investing its product and engineering resources toward this goal for about a year.
“Over the span of the year we did a bunch of things that meaningfully accelerated our business there,” Airbnb cofounder and CTO Nathan Blecharczyk told Fast Company in a June interview.
His team built a localized version of the app that, for instance, integrates with social networks WeChat and Weibo so that Chinese users can sign on with one click (the Chinese government blocks Facebook and Twitter). It also works with a local version of maps instead of Google Maps and integrates with Chinese payment systems. “You kind of go down the list and everything is a little bit different,” he said.
These may seem like small tweaks, but Blecharczyk credits them with accelerating the growth of outbound travelers from China who use Airbnb. Before the tweaks, he said, that business was tripling year-over-year. After the changes, it accelerated to sixfold year-over-year (Airbnb now cites its growth rate in China at 700%).
Localizing the app also represents a significant investment of time from Airbnb’s engineering team, which Blecharczyk described as “in some ways a much more precious resource than even cash.”
It’s easy to see why Airbnb was willing to make such an investment: Chinese travelers spend more on going abroad than those in any other country, and local versions of Airbnb are competing for their business. One rival, Tujia, recently raised $300 million at a valuation of more than $1 billion.
In an interview with the Wall Street Journal, Tujia cofounder Melissa Yang said the company plans to set up overseas branches within the next six months.
Chesky said in his statement that the first task for the company’s new strategic partners, China Broadband Capital (CBC) and Sequoia China, would be to recruit a CEO for Airbnb China. “As we move into our next phase of expansion in China,” he said, “we know we will need deep local knowledge and expertise to keep this momentum going.”