Airbnb will cease business operations in China according to a new report from Reuters and several other news media. The company will officially close down in the country from July 30, although Chinese customers will still be able to use the service for rent rooms abroad.
“We have made the difficult decision to refocus our efforts in China on outbound travel and suspend the experiences of our homes and hosts in China, starting from July 30, 2022,” Airbnb said in a WeChat post Tuesday, according to an English translation. by Reuters.
Approximately 150,000 real estate ads are expected to be removed from Airbnb by the end of July, according to New York Times. The company first started in China in 2016.
Oddly enough, the decision to leave the Chinese market has not yet been formally announced outside of a WeChat post, and when it was reached for comment late Monday, Airbnb public affairs officer Christopher Nulty declined to comment on the record of the withdrawal from China.
That Wall Street Journal reports that the reason Airbnb is leaving China can be attributed to both fierce competition from local businesses and severe covid-19 lockdowns in the country, even though the latter’s influence on leaving such a large market seems illogical. China has a population of 1.4 billion people, and although government shutdowns have been harsh, they have been localized and relatively short for the vast majority of the population.
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The more logical explanation is that Airbnb simply could not compete with apps that offered a variety of services through one portal. As an example, the Journal mentions Beijing-based Meituan, which is a so-called super-app that does everything from food delivery to cinema tickets. Meitunan also has a “lodging marketplace” that was renamed in 2019 to directly take on Airbnb. The name, Meituan B&B, makes the competition even clearer.
WeChat and AliPay are two more super-apps that are incredibly popular in China that provide one-stop shopping for pretty much anything without visiting a standalone app like Airbnb.
Airbnb is not the only US brand that has recently given up on the Chinese market. Urban Outfitters and Everlane both left China in late 2021 after consumers decided that Chinese competitors were just as good or even better than their American counterparts.
As Reuters notes, other tech companies have also withdrawn from China in recent years, including LinkedIn and Yahoo, although decisions by these companies probably had more to do with concerns about data sharing with the Chinese government. The US government even claimed in 2018 that China used LinkedIn to recruit spies.
While some US companies are leaving China, others are at full speed, like Tesla, which recently opened a huge factory in Shanghai. But only time will tell whether companies like Tesla can cut back on China as the company’s high-profile CEO, billionaire Elon Musk, continues to embarrass himself on the world stage.