Airbnb’s China head exits after just four months

October 25, 2017 15:22
Airbnb has had a rocky experience in the China market, where local restrictions have slowed down the platform’s growth. Photo: Airbnb

The head of Airbnb’s China business has left the company after only four months in the position, Bloomberg reports.

His departure reflects the struggle Airbnb faces in China, where foreign players are humbled by protectionist laws and fierce local competitors.

Hong Ge, a former software engineer at Facebook and Google, announced this week in an email to colleagues that he was leaving Airbnb China to pursue other opportunities.

Asia-Pacific head Kum Hong Siew will act as interim China chief until a replacement is found, the report said.

The home rental portal has had a rocky experience in the China market, where local restrictions have slowed down the platform’s growth as it goes up against local rivals Xiaozhu and Tujia. The platform has continued to suffer disruptions, including forced cancellations of bookings in Beijing’s city center during the just-concluded Communist Party congress.

Since 2013, the company has offered properties in China. In October last year, Airbnb announced it would spin off its China operations as a separate business to comply with local regulations.

This year, chief executive Brian Chesky renamed the service “Aibiying” and pledged to double investment in the country. The company now complies with controversial laws that give local authorities access to users’ information.

According to Bloomberg, Airbnb had searched unsuccessfully since 2015 to recruit a business chief for China. The search dragged on until June 2017, when Hong Ge was tapped for the position.

The China business has expanded aggressively over the past few months. Its offices have grown from 30 people to over 120 in Parkview Green in Beijing, while total listings have doubled to 140,000 from 70,000 a year ago.

Ge announced previously that his team reduced instances of fraud from over 8 percent of gross bookings to less than 2 percent. And the company is on track to double room-nights of Chinese origin to 8 million this year.

In his email sent to colleagues, Ge wrote: “It’s a very tough decision for me to leave behind all of what we have built together. But hey, it’s a small world. I will still be in the internet industry. I’m sure our paths will cross again in the future.”

On Oct. 19, the company announced that co-founder Nathan Blecharczyk would take over as chairman for the country, spending half his time on the China business and making monthly trips to the country from the United States.

Airbnb’s major China rival, Tujia, has recently raised US$300 million to sharpen its focus on global markets, putting its valuation at US$1.5 billion.

As Techcrunch previously reported, Tujia, backed by China’s largest online travel agent, claimed that it now covers 345 destinations in China, and more than 1,000 overseas. In total, it claims more than 650,000 listings worldwide.

Airbnb isn’t the first US-based company to struggle to get a stronghold in China. Uber Technologies Inc., after losing the battle with local competitor Didi Chuxing for market share, finally agreed to sell its China business to Didi last year.

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EJ Insight writer