Image source: REUTERS
Airbnb has announced they will be withdrawing from China, following other companies that have left the market. The company said in a press release that all their listings and experiences within China could not continue operating after July 30 due to several reasons.
The company posted the announcement through its official WeChat account. However, the reasons for their decision weren’t specified in the announcement. Even though it is no longer available to book listings or experiences on Airbnb in China, Chinese users can still use it abroad.
“We have made the difficult decision to refocus our efforts in China on outbound travel and suspend our homes and Experiences of Hosts in China, starting from July 30, 2022,” said Nathan Blecharczyk, Airbnb co-founder, in a statement.
Airbnb was forced to shut down its domestic facilities in China due to the costly operation costs and other restrictions, such as lockdowns amid the COVID-19 pandemic.
Accordingly, a reliable source whose information was published by Global Times said that Airbnb’s exit from the Chinese market had been triggered primarily because of these two factors – one for the expensive cost of running local operations while another is for the economic ramifications of COVID-19.
The media is waiting for the management’s reply to the issues.
Airbnb is the latest in the list of Western internet companies that have exited China due in part to the country’s decision on internet decoupling. While China is the second-largest economy, companies like LinkedIn and Yahoo still chose to retreat from the country.
Further, issues relating to censorship, operational hurdles, and others are what prompt many Western internet platforms to shut down their services in mainland China. Meta’s Facebook and Alphabet Inc’s Google have earlier said the same.
The COVID-19 pandemic has caused more issues to arise, including the lockdown protocols and restrictions on business. This is causing major economic hubs like Shanghai to close down, affecting foreign investors who may consider withdrawing from China in response.
Airbnb has millions of users worldwide, but the company’s retreat from China will cost them 150,000 listings comprising about 1% of the company’s revenue. However, their exit isn’t too damaging considering that the company is six million strong.
The company opened its services to Chinese consumers back in 2015, seven years after it was founded in 2008. Airbnb also localized services by partnering with WeChat, competing with market rivals Xiaozhu, Meituan, and Tuija.
The company opened to the Chinese market back in 2015, seven years after it was founded in 2008. To compete with market rivals Xiaozhu, Meituan, and Tuija, Airbnb also localized services by partnering with WeChat.
The global markets have been volatile lately, and that has had an effect on the shares of the company. On Monday, it rose 0.7% on Nasdaq but lost 1.6% in post-market trading.
Airbnb rival Meituan announced that it would help hosts pin listings on their platform via its vacation rental business, while Tuija announced the same.