Jennifer Li, CBO, Tujia
Launched in 2011, Tujia is a Chinese homestay platform - most often compared to Airbnb - with more than 1.4 million homes. In 2016, it acquired Ctrip’s homestay business, and the following year, Tujia bagged a $300 million funding round, valuing the company at more than $1 billion.
Prior to becoming chief business officer at Tujia, Jennifer Li served as CEO of Ctrip’s homestay business unit. She’s also had stints at leading Chinese internet companies including Baidu and Dianping.
Can you talk generally about how Tujia has approached its growth strategy since buying Ctrip’s homestay business in 2016?
Since the acquisition of Ctrip’s homestay business in 2016, both sides have cooperated closely, which not only led to greater share of inventory but also mutual benefits and strong synergies.
Moreover, Ctrip has given Tujia enormous support on traffic and data. Now Tujia has the largest traffic in the homestay industry with over 1.4 million online houses.
Large increases haven been seen at Tujia in terms of transaction volume, net commission rate and the number of daily active users. In 2017, Tujia’s annual transactions increased five times. Last year, Tujia's order volume grew nearly four times that of 2017.
Occupation
Chief business officer
Social
https://www.tujia.com/
How do the brands - Tujia and Ctrip - benefit each other?
As a leading alternative accommodation-booking platform in China, Tujia has the best and the largest number of homestay resources in the whole industry, making it an indispensable supplement to Ctrip's homestay products.
Meanwhile, Tujia's overseas homestay resources will also be able to supplement to Ctrip's overseas homestay inventory, which will be helpful for the internationalization of Ctrip.
As the largest online travel company in China, Ctrip has supported Tujia on various aspects including shared inventory and traffic conversion, which benefits Tujia users, merchants and house owners.
In addition, Tujia benefits from Ctrip’s reputation as a reliable and trustworthy brand. Tujia is able to ensure customer experience by learning from Ctrip's experience and applying its best-in-class service to Tujia’s business.
Following a $300 million funding round in October 2017, Tujia was valued at more than $1 billion. What kind of opportunity does that bring with it?
We believe technology and innovation drive an internet company’s productiveness. The funding round will support Tujia in technical improvement and business innovation in order to upgrade the alternative accommodation industry in China.
In addition, it also helps Tujia optimize user experience and accommodation products, for example, setting the standard of linen and cleaning in the industry. We firmly believe opportunities to expand in overseas market will be given to those innovative companies with best-in-class service.
Tujia - particularly in the West - is most commonly compared to Airbnb. What are the key similarities and differences between the brands?
We both are homestay and short-term rental booking platforms. Talking about differences, the first lies in the business models. C2C and B2C coexist on Tujia, that is to say, the owner-running model and Tujia platform-running model are both operated.
Meanwhile, Airbnb mainly uses the C2C model. For example, on Airbnb, owners might share part of their houses (secondary bedroom) to lodgers. We notice that Chinese find it difficult to live in a shared house with strangers, thus Tujia's homestay resources are mainly entire houses.
Secondly, our market focus is different. At the current stage, Tujia mainly serves Chinese and meets their outbound lodging demands. The focuses of Tujia's overseas expansion are frequently visited countries by Chinese such as Japan and Thailand. Airbnb puts more emphasis on the European and American markets.
How does Tujia differ from other Chinese brands such as Xiaozhu?
As mentioned, C2C and B2C models coexist on Tujia; Xiaozhu is based on the C2C or platform model.
Moreover, Tujia launched "agent business" in 2017, which aims to help more idle houses realize their value. Tujia's agent business offers one-stop hosting services, including house preparation, packaging, online launching, operation, sales, welcoming customer and house cleaning for owners of idle houses and homestay operation enthusiasts in cities and helps owners easily realize gains from short-term rental of their houses.
At present, Tujia's agent business manages nearly 10,000 suites, covering 100 cities nationwide.
How has Tujia grown outside of China, and in what markets are you seeing the most growth?
In early 2018, Fishtrip, which focuses on overseas nonstandard hospitality markets, joined Tujia, bringing 300,000 high-quality overseas houses, and was incorporated into Tujia's overseas business department.
Up until 2018, Tujia had over 1.4 million houses worldwide, including, notably, over 400,000 overseas houses, and Tujia's overseas orders gained a 10-time increase.
The homestay business is growing rapidly in overseas destinations frequently visited by Chinese. Tujia's overseas market expansion mainly focuses in Asia. Offices have been set up in Japan, Singapore, South Korea and Taiwan.
Now the demand for in-depth experiences among Chinese tourists is becoming stronger. In particular, with the issuance of the two-child policy, travel with family has increased greatly year-on-year. Homestay is very popular among them because of its cost-efficiency and unique experience.
What about targeting expansion in the West?
One of our focuses of 2018 was to improve the service standard system in overseas markets by transplanting standards and systems for the domestic market to overseas markets.
In addition, in the fostering of overseas owner operation, Tujia has upgraded the "Tujia WAKA" strategic platform targeting overseas markets that offers Tujia's nine-in-one traffic advantage and multi-platform display and operation advantage through logging in one platform to overseas homestay operators.
In 2019, Tujia will stick to meeting the demands of Chinese outbound travelers, and therefore Asian markets will be key focus for Tujia's overseas expansion, especially Japan, South Korea and traditional Southeast Asian markets.
How does Tujia utilize various channels - mobile, computer, WeChat, etc. - to serve customers? What about offline?
According to a previous survey conducted by Ctrip, over 43.2% of users know Tujia via domestic search engine and apps.
It is a mobilized world in China: Users can easily book through various channels such as app, WeChat, etc.
Even though each homestay and short-term rental platform positions itself differently and targets different type of users, I believe all of us are working hard to create a healthy industrial environment and make the cake bigger.
Jenniver Li
Users not only can reach out to Tujia through website, app and WeChat mini program, but also they can reach out to us via many collaborative platforms such as Ctrip, Qunar, Mayi, eLong, etc.
In the meantime, Tujia Homestay University offers online courses to owners, guiding them to upgrade service level and raise efficiency.
In terms of offline, we organize offline events regularly. For instance, Tujia "Super Meeting" invites industrial opinion leaders to share their operation and working experience.
Moreover, Tujia holds offline salons, which invite excellent operation experts and house owners to share their stories. We believe those activities are a way to improve owners' stickiness and satisfaction with us.
Tujia has mentioned the “homestay reservation matrix” of Ctrip Homestay, Qunar Homestay, Tujia.com, Mayi.com and Fishtrip.com. What do you mean by that?
Tujia acquired Ctrip's homestay business, Qunar's homestay business and Mayi in 2016, and Fishtrip in 2017, through which a new Tujia group with shared house inventories has formed.
Besides those major platforms, Tujia also distributes inventory to eLong Homestay, 58 Ganji, WeChat Hotel, Zhima Credit and Fliggy, forming a nine-in-one matrix.
Tujia has the highest traffic in the homestay industry. Users who book Tujia homestay through all those platforms can enjoy same high-quality homestay as on Tujia itself.
How is Tujia’s partnership with SiteMinder coming along?
SiteMinder is the global hotel industry’s leading cloud platform.
The partnership involves the integration of the two companies’ technologies to provide a significantly improved user experience for overseas hosts, including the thousands that are already existing users of both Tujia WAKA and SiteMinder.
Through the integration, those hosts will benefit from synchronized, real-time reservations, availability and pricing data.
This cooperation will bring synergy and mutual benefits to both companies. The setup is sure to integrate the best prices with the most optimized inventory, reducing the chance of refused or disputed orders by at least 90%.
How do you view companies like Meituan and Alibaba as competitors in the short-term rental category?
At present, the homestay industry is still in the early stage. Even though each homestay and short-term rental platform positions itself differently and targets different type of users, I believe all of us are working hard to create a healthy industrial environment and make the cake bigger.
You were CEO of Ctrip’s Homestay business unit before becoming CBO of Tujia in 2016. What were your biggest achievements as CEO?
Homestay is an innovative business unit at Ctrip. We became the second in the market at that time in just two years.
And what were the most important lessons you learned that you brought onboard to Tujia?
The homestay product itself is a supplement to and innovation upon conventional lodging forms in the market.
After Tujia’s acquisition of Ctrip's homestay business, we have gathered leading products and technologies in the market while offering the most complete services, through which we have received positive feedback.
Do you view government regulations in a positive or negative light, and how do you approach working with the government?
At the end of November 2018, at On-the-Spot Meeting on Developing Countryside Homestay Nationwide and Promoting All-for-one Tourism, the Ministry of Culture and Tourism stated clearly that developing the countryside homestay industry is an important approach to increase cultural and tourist consumption.
Local governments are also issuing regulations and standards on house sharing. This new economic form is welcomed by government.
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In recent years, Tujia has been actively promoting the implementation of local homestay standards and regulations through close cooperation with relevant municipal and provincial governments.
Tujia has currently become a key member enterprise of the national shared economy team.
For example, Tujia and Shaanxi Province government have reached a strategic cooperation agreement on a global intelligent homestay demonstration project to build the first "intelligent homestay holiday cluster demonstration project" in China.
Tujia also participated in helping form homestay regulations in countries like Japan, South Korea and Thailand, as well as in cooperation of government projects. So far Tujia has established strategic cooperation with Otsu and Uonuma government in Japan.
What are some of biggest things the West does not understand - or misunderstands - about Chinese travelers?
I would like to discuss two points:
- The purpose of Chinese outbound travelers is not just shopping. Some research shows that less than 15% of travelers take shopping as the main purpose of travel, while 63% of them think most important is to enjoy local views and customs. That has deeply influenced the ways global tourist destinations are attracting tourists.
- Chinese travelers are misunderstood due to cultural and habit difference. For example, we do not have a tip culture in China, and eating in public is acceptable. We are glad to see the gap between the West and the East is narrowing.
What makes the Chinese market appealing to a home-share company?
China has been the world's number-one country for outbound tourist and consumption for six consecutive years, which has benefited other countries in the world.
Shared homes have become an important lodging choice of outbound Chinese tourists.
Forty-five percent of outbound tourists say that they once lived in overseas homestay, family inns or vacation rental homes. Increasing demand to choose shared homes has brought the proportion as high as 68%. In the first half of last year, Tujia's overseas orders increased 10 times.
From the market perspective, as of the end of 2018, the industry's transaction size was about 14.5 billion yuan, up 70.6% over 2017, and the industry is in rapid growth period.
At present, there are about 50 million vacant houses in China, which is a huge supply end to homestay, showing great potential for growth.
On the demand end, consumers' lodging demands are more diversified and segmented.
The inclusiveness and individuality of homestay that independent houses have, largely, make up for the deficiencies of standard starred hotels and economical hotels. Home-share is enjoying more popularity. China is a tourist market with great potential.
There are more millennials in China than there are people in the United States, and many of those millennials are traveling for the first time. How is Tujia targeting that specific market?
As millennials' economic power is expanding, their expenditures in tourism are gradually increasing. They have already become one of the dominant spending powers on the tourist market.
They have two prominent features: They are becoming more dependent on the mobile end and have stronger demands for individualism.
Catering to their needs, Tujia has been constantly making innovative attempts in recent years:
- Experience upgrade. While increasing homestay resources quickly meets demands, upgrading experiences is also becoming very important. For example, not long ago, Tujia and JD Home had cooperation to apply intelligent homestay in consuming scenarios, through which users can directly order by scanning the furniture at the lodging. That is not simple lodging but an immersive lodging experience, maximizing the two parties' functional and product advantages. That is very attractive to younger users.
- Marketing innovation. Traditional marketing campaigns can no longer attract younger users. In the past two years, Tujia has been trying various innovative content plus scenario marketing campaigns to win customers precisely. Relatively small investment is needed but can quickly achieve precision transformation.
For example, "Meishujia," a major project Tujia launched last year, has promoted and created a batch of famous homestays on the internet by working with traveling KOLs through new social channels.
Through Meishujia, some homestay houses' booking volumes increased by 10 times, and younger users have acquired rich and interesting information, which has increased stickiness of users.