Airbnb Inc. is in talks to acquire China’s Xiaozhu.com to expand in the nation’s home rental sharing market.
The companies have held multiple meetings and the discussions are advanced in nature, Bloomberg reports, citing an unidentified person familiar with the matter.
The San Francisco-based company already has about 75,000 properties listed in China and plans to increase staffing 10-fold to 300 full-time workers, the report said.
But it has to contend with more established local rivals Xiaozhu and Tujia.com.
“It means Airbnb becomes a meaningful player in the domestic market in China,” if the deal goes through, said Douglas Quinby, vice president of research at travel research firm Phocuswright.
“It’s really about getting a foothold in a key market.”
Airbnb and Xiaozhu declined to comment on whether the companies were in talks about a deal.
China’s online holiday rental market could reach 10.3 billion yuan (US$1.5 billion) in transaction volume by 2017, up from an estimated 6.78 billion yuan this year, according to IResearch.
Before the deal surfaced, the US startup had been anticipating 2 million “room nights” in China, the source said.
The company had also recently signed a partnership agreement with Tencent Holdings Ltd. (00700.HK), whose messaging service WeChat has more than 800 million active monthly users and provided 60 to 70 percent of Airbnb China’s logins.
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