At some point, China was one of the most promising country markets for the booking platform AirBnb. And China seemed to embrace the concept – initially. However, in 2022, the company decided to shut down its business in the Middle Kingdom, after only five years of trying to establish a foothold. What happened, you might ask?

Airbnb officially entered the Chinese market in 2015, launching its services under the localized name “Aibiying,” which translates roughly to “welcome each other with love.” There was a good amount of initial optimism, which quickly waned, as one hurdle after another emerged. It was clear from the beginning that operating in China required to navigate a challenging regulatory environment. Airbnb faced stringent data localization laws, necessitating the storage of user data within China and compliance with government data requests. These were often woven into a web of an intricate bureaucracy and even more complex government relationships, all of which posed significant operational and ethical challenges for the company. Then, there was the cultural mismatch. Airbnb’s business model thrives on the sharing economy and the thrill of highly individualized experiences. Chinese travelers, however, often prioritize reliability and standardized services, making traditional hotels more appealing than private home rentals. The concept of staying in a stranger’s home did not resonate well with many Chinese consumers, which lead to trust issues and limited adoption. In addition, AirBnB had strong local competitors for those consumers who sought the peer-to-peer experience. The Chinese market is dominated by local platforms like Tujia and Xiaozhu, which offer services tailored to domestic consumers’ preferences. These competitors benefited from better local knowledge, established user bases, better network relationships, and integrations with popular Chinese apps like WeChat or Alipay. As the company was struggling to gain a strong foothold in the market, the company made frequent leadership changes, with multiple general managers appointed over a short period. This instability impacted the execution of a coherent long-term strategy, affecting the company’s ability to respond effectively to the market. And the COVID-19 pandemic with its travel restrictions certainly didn’t make it easier for AirBnB.By the time of its exit, Airbnb only had approximately 150,000 listings in China (out of a total of 6 million globally), accounting for a mere 1% of its worldwide revenue. The company’s exit once again proved that even the best functioning business models and the most valued brands don’t guarantee easy success in foreign markets.