Users are diversifying on China’s home sharing apps

China Market Research User Behavior - China Vacation Rental Market Users Hosts

Market research agencies get very interested in big groups of big spenders. And no one’s tossing cash around the planet quite as exuberantly as travelers from mainland China (HospitalityNet):

“The United Nations World Tourism Organization (UNWTO) found that spending from Chinese tourists abroad now makes up 21% of all tourism spending. In addition, each Chinese traveller spends on average more per trip than tourists from any other country.”

So there’s lots of research out there profiling the needs of the Chinese tourist. Thing is, the “Chinese tourist” is a concept that’s undergoing a constant and rapid evolution, and if you’re still thinking in terms of baseball-capped retirees trudging on and off tour buses, you’re out of touch, my friend.

As travel becomes popularized among a wider segment of Chinese society, the market is no longer a monolithic one. These days, 60% of Chinese tourists are traveling independently. People of all ages are taking to the road, and there’s more interest in unique experiences and off-the-beaten-track destinations.

Eight types of Chinese traveler

McKinsey notes the diversification trend in a 2018 report, segmenting China’s outbound tourists into eight major types:

  • The Value-seeking Sightseer: Low- to middle-income mothers and fathers seeking quality family time and less interested in shopping
  • The Backpacker: Low- to middle-income workers, aged 20-30, and interested in having affordable, authentic, off-the-beaten-track experiences
  • The Unplugged traveler: Single, middle-income, and exhausted – looking to escape day-to-day life pressures
  • The Shopper: Married couples, aged 30-40, who want to do the basic sightseeing rounds but are primarily interested in filling up on goodies
  • The Aspirant: Lower-income, big-city residents to whom travel is a status symbol
  • The Novice Traveler: Middle-income and unadventurous, wants an easy, predictable tour of basic landmarks
  • The Individualist: Young, high-income travelers interested in highly unique and personalized travel.

App users are likely to diversify too

That same diversity is likely to start showing up on China’s domestic home sharing apps like Tujia 途家, Xiaozhu 小猪 and AirBnB 爱彼迎, whose user bases have, until now, been fairly one-dimensional: 20- to 30-somethings based in major urban areas. 60% of AirBnB’s user base in China is under 35, for example. And these digital platforms (and the industries that serve them) have enjoyed the luxury of catering to a homogeneous market.

But as internet penetration begins to spread to older age groups and less central locations, and as more diverse Chinese tourists try out vacation rental platforms on trips and then return to become hosts themselves, we should begin to see those user numbers spread out across a wider spectrum of education levels and income brackets.

The spectrum of potential users in China is wider than most other places (Bloomberg):

The wide disparity puts some residents at the cutting edge of the developed world, stepping into battery-powered cars that silently ease down city streets, or as consumers facing advertising choices generated by image-recognition technology. Across China, close to 1 billion consumers shop or pay for purchases using apps on their smartphones. At the other extreme are rural towns where water still needs to be carried by hand from a well.

China’s rural heartland: the next home-sharing frontier

Home sharing apps are also aggressively pushing to open markets in China’s lower-tier cities and rural areas, where the poverty gap is particularly acute. The “Guilin Rural Community Tourism program” is an AirBnB initiative aimed at “identify[ing] and promot[ing] new economic opportunities for locals through home-sharing”.

And homegrown home-sharing app Xiaozhu is on the same track, partnering with the government of Hainan province to boost rural tourism via the platform.

What’s it all mean for businesses and design teams?

Travel companies hoping to succeed in China’s new rural markets will need to contend with an extremely diverse user population, and design a product that allows both tech-savvy urban users and newly-connected rural users to feel at home on the same platform. There may be some lessons to learn from startups that have already faced this problem. “Home restaurant” app Huijiachifan 回家吃饭, for example, is allowing a generation of busy, poorly-fed Millennials to order home-cooked meals from a generation of stay-at-home grandparents. Leveraging China’s cheap labor advantage, the company solved the tech-savviness gap on the supply side by sending representatives to the homes of newly registered cooks. Reps would provide basic training on app use and help cooks set up digital wallets and photograph completed dishes.

As for the opportunity that more diverse markets present, there’s also the potential for new niche apps to grab up user segments that are poorly served by the one-size-fits-all approach of bigger platforms.


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