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Airbnb Marketing Plan
Jingyi Zhang
Laura Ginsberg
Oumaima Karimallah
Table of Contents
Executive Summary 2
Background 6
Chinese Market Analysis 6
Target Audiences 7
Competitors and Imitators 8
Challenges Facing Airbnb 10
Objectives and Strategies 11
Annual Objectives 14
Annual Tactics 14
Risk Management 20
Success Matrix 22
Investment Thesis 23
Next Step 23
Marketing Brief 24
Appendix 27
1
Executive Summary
Chinese market: major growth potential
The market in China is ripe for growth in the hospitality sector. The Chinese economy has grown
at an annual rate of more than 7% between 2009 and 2014 and discretionary spending is forecast
to exceed 7 percent between 2010 and 2020. Almost every Chinese citizen travels at least twice 1
each year, with 107.9 million trips taken in 2014 alone and departures growing at a CAGR of
17.7% . The seeds of the sharing economy of personal living space have been planted in China, 2
as 56% of local people would be interested in posting their idle housing on websites such as
Airbnb. China currently has more than 36% living spaces that can be used for shorttime rentals,
but only 2.6% idle housings have been developed. Despite this, the population is largely 3
unfamiliar with the concept. Language is one of the main barriers, in addition to travel booking
behaviors which, from one side, involves travel agencies and from another, Chinese websites to
book both the transportation as well as the accommodation. In order to address these issues, and
with the objective of achieving 30% of the hospitality sharing economy market share in China,
our strategy is to hone in on a specific target in order to be able to understand the customer, their
needs, as well as their behavior.
Millennial selfguided travelers are sharing economy pioneers
We will first focus on millennial, “selfguided travelers’’ who have at least basic English
speaking skills and seek adventurous experiences. Flexible, comfortable out of their comfort
zone and open to new experiences, they use social media to express themselves and to
consistently share their likes and dislikes with family, friends and peers, offering
recommendations when they feel fully satisfied. Based on our research, up to 70% of Chinese
travelers are what we call “selfguided travelers,” 44% rely on wordofmouth when planning
trips, and 30% use social media as a source for tips and advice making this a compelling target 4
customer to set our sights on at the outset.
1http://www.mckinsey.com/businessfunctions/strategyandcorporatefinance/ourinsights/whychinasconsumerswillcontinuetosurprisetheworld 2 http://www.cottm.com/newscenter/news/travelandtourismchina2019 3 http://finance.sina.com.cn/manage/mroll/20160202/docifxnzanh0606537.shtml 4 http://www.citm2015.com/pdf/hcomcitmreport2015inter.pdf
2
Competition leaves holes yearning to be filled
Airbnb is competing resources from two different industries. One is the travel industry and the
other is the hospitality industry in the sharing economy field. Competition is comprised of
websites that offer both travel booking in addition to accommodation as well as the Chinese
imitators of Airbnb. The biggest shortcoming of the first category is the rigid packages that only
allows the traveler to stay in one place during his entire trip, while a traveler prefers to spend his
trip of 12 days in 3 different places, with an average of 2 nights per city. Airbnb has 5 times
more followers in Chinese social media than its local competitors in total (Xiaozhu and Tujia),
which means Airbnb definitely has relative brand awareness in China even though we have not
officially launched there.
Objectives, Strategies & Tactics (From May 2016 to May 2019)
Market share objectives
Years Year1 Year2 Year3
Market Share (Listings/Hosts)
1%
10%
30%
Market Share (Guests)
5%
20%
45%
Financial objectives
Years Year 1 Year 2 Year 3
Host Revenue (3% $ million) 4.5 54 210.5
Guest Revenue (9% $ million) 13.5 162 631.5
Total Revenue 18 216 842
3Year Strategies (From May 2016 to May 2019, based on importance)
3
S#1 Starting by targeting 18 million outbound Chinese selfguided travelers, followed by local selfguided Chinese travelers (140 million), and reaching local Chinese hosts thereafter (50 million).
S#2 Localize all Airbnb products and services to culturally speak to the local market and address the mindset of the Chinese people to have 50 million new users sign up in 3 years.
S#3 Develop 3 partnerships in the travel industry and sharing economy of shortterm rental industry.
S#4 Create and execute digital marketing strategy to reach 250 million Chinese travelers and achieve a 20% conversion rate.
S#5 Expand the host offerings by 30%.
Annual Brand Objective (From May 2016 to May 2017): Increase Airbnb’s guest market
share in China to 5%. From the guest perspective, comprised mostly of travelers, we aim
to reach 18 million travelers and have 3.6 million individuals sign up and use Airbnb.
Annual Financial Objectives: Achieve $18 million revenue in China.
Annual Tactics Overview (From May 2016 to May 2017)
4
Value Proposition
Tactic Description Success Matrix (semester based)
Time Frame Budget ($ million)
Trust & Safety
#1 Xiaozhu acquisition 05/01/1607/31/16
40
#2 Wechat Partnership
06/01/1608/31/16
0.2
#3 Financial company partnership
If the partnership
with “Wechat” is successful
06/01/1608/31/16
0.1
#4 Local team establishment It’s a necessity (market pressure)
05/01/1608/31/16
5
Special Travel
Experience
#1
Travel website partnership
Reach 2.2 million travellers
06/01/1605/01/17
20
#2 Social influencer collaboration
Reach 10 million travelers
06/01/1608/31/16
12/01/1602/28/17
10
#3 Digital marketing campaign Reach 5.8 million travelers
06/01/1608/31/16
12/01/1602/28/17
5
#4 Product localization Major factor of success (customer pressure)
05/01/1605/01/17
10
#5 Travel credit incentive Reach 5 million travelers
Before each break time in
China
250
5
Total 18 million (tactics have
overlap)
350.3
6
Background
We are opening up the world, connecting people and experiences one spare bed at a time. Last
June we opened our Auckland, New Zealand office to tap into the Kiwi holidayhome rental
community, which was set to double yearonyear. The endeavor has proven to be a huge
success and we are on course to meet our strategic and financial goals in the market. This year,
120 million Chinese travelers await us. The time is now to capture this booming market!
Huge market potential in China
The market in China is ripe for growth in the hospitality sector, as the economy has grown at an
annual rate of more than 7% between 2009 and 2014 and discretionary spending figures continue
to rise. According to a 2014 McKinsey report, “Growth in spending on annual discretionary
categories in China is forecast to exceed 7 percent between 2010 and 2020, and growth of 6 to 7
percent annually is expected in a second category of ‘seminecessities’.” (See Figure 1) Another 5
important measure of consumption, household income, has risen above $5 trillion a year in
China, another indication that the hospitality market, which is sensitive to the health of the
national economy, is ready for takeoff. As a result of this increase in consumption and
discretionary spending, more and more Chinese citizens are looking to travel abroad, with 107.9
million trips taken in 2014 alone and departures growing at an impressive CAGR of 17.7% . 6
According to John Kestor, director of the tourist market trends program at the United Nations
World Tourism Organization (UNWTO), “China has been growing as a tourism source market
with "double digit growth" every year since 2014 and this growth was repeated in 2015.” The 7
growth of the economy, rise in the tourism market, and increase in discretionary spending figures
and household income are firm indications that there is serious market potential for us in China.
Chinese Market Analysis
Outbound traveling in China is booming
5http://www.mckinsey.com/businessfunctions/strategyandcorporatefinance/ourinsights/whychinasconsumerswillcontinuetosurprisetheworld 6http://www.cottm.com/newscenter/news/travelandtourismchina2019 7Ibid
7
The tourism industry in China is booming from both an inbound and
outbound perspective. Based on the latest statistics from the China National Tourism
Administration (CNTA), more than 120 million Chinese citizens travelled outside the mainland
in 2015, which makes China the number 1 outbound travel country for the third year in a row.
(Since traveling to Hong Kong, Macau and Taiwan counts as outbound travel, which accounts
for 70% of the total number, the actual number of outbound Chinese travelers is around 36
million.) China has maintained the fastest growing rate over the last five years. The CNTA also 8
announced that the outbound travel market in China is still in the fermentation stage in
comparison to China’s 1.4 billion population and its fastgrowing middle class population.
Gigantic market of local traveling and sharing economy
Tourism in China has been stable and robust and statistics show a significant local travel market
where almost every Chinese citizen will travel within the country twice each year. The sharing
economy of living space market is huge as well. Data from a local Chinese agency shows that
around 56% of local people who are familiar with the “sharing rentals + travel” concept would
like to post their housing on websites such as ours. China currently has more than 36% living
spaces than can be used for shorttime rentals; however, only 2.6% idle housings have been
developed. Not only are Chinese people actively traveling, but they are also becoming 9
increasingly open to the concept of offering their homes to the sharing economy marketplace, as
they become more familiar and comfortable with the idea.
Target Audiences
Overall Customer analysis
Demographics
Middle class and above
Average age: 35 years old
Most are from eastern cities such as Beijing, Shanghai, and Shenzhen (highest economic
growth)
8 http://www.ttgchina.com/article.php?article_id=4143 9 http://finance.sina.com.cn/manage/mroll/20160202/docifxnzanh0606537.shtml
8
Average travel time is 12 days
Psychographics
Desire to spend money to increase their quality of life
Unlike their parents, they are not saving all of their money for the future and their kids.
They seek highend products and services and spend more money on themselves. This
group of people can be considered as the mainstream for providing home resources
online.
People under 35 have grown up with the Internet and are more open to new concepts.
They have the curiosity to explore the world and to try new things. Since more and more
people under 35 are having stable income, they become the primary customers in the
outbound markets. They are also the strongest supporters of the sharing economy.
Selfguided Chinese travellers are our primary target
Our target demographic within the Chinese market are millennial, “selfguided travelers” with at
least a basic level of English who seek new experiences. Our research has shown that up to 70%
of Chinese travelers are in fact “selfguided,” booking every aspect of their trip on their own,
without the help of an agent or service. They do their own research, seeking advice on travel
websites and booking lodging and accommodation through Chinese travel websites such as
ctrip.com. They are flexible, feel comfortable out of their comfort zone, and are open to new
experiences. They use social media to express themselves and to share their experiences with
their family, friends, and peers. They express their likes and dislikes, make recommendations
when they are satisfied, and use reviews and ratings to judge an experience before committing.
Competitors and Imitators
Online booking website is Airbnb’s biggest competitor, but travel planning website can
become Airbnb’s partner.
With the development of the Internet, traditional travel agencies have been challenged by the
new tendency of travelers to book everything online. Online booking websites such as ctrip.com
9
and tongcheng.com and travel planning websites such as mafengwo.com 10
have become travelers’ priority and goto, especially for selfguided travelers. On one hand,
travel agencies have teamed up with online booking websites providing vacation packages in
order to retain customers. On the other hand, those online booking websites also provide “flight
tickets + hotel” travel packages in a cheaper price for travelers who travel by themselves. As a
result, these online booking websites are our direct competitors from the consumer perspective.
In addition, websites where travelers can search for travel information and also leave suggestions
and reviews about the cities for the future travelers, such as “TripAdvisor,” can be considered as
a huge potential partner to let more travelers know about Airbnb.
Shortcomings of Chinese online booking websites
After researching the entire spectrum of Chinese online booking websites, we discovered a
significant problem on the “flight tickets + hotel” travel packages which aim to attract
selfguided travelers. The total price is cheaper and attractive indeed; however, it doesn’t meet
all of selfguided travelers’ needs since the packages only provide hotels in one place for the
entire length of the trip. Few Chinese selfguided travelers would like to stay in the same place
for more than 4 days when they travel on an extended holiday. Most Chinese citizens travel
during holiday breaks, which are no more than 10 days, and the average time that they spend in
one city is two days. Clearly, the Chinese online booking websites are not comprehensively
meeting the needs of the Chinese travelers of today.
Airbnb has better market potential than Airbnb’s Chinese imitators.
Product localization is the key to success in China. Almost every worldwide popular
product/website/social media platform is copied and grown into a Chinese version because of
political and regulatory issues. For instance, Twitter’s Chinese version is Weibo and YouTube’s
Chinese version is Youku. Likewise, the two pioneers of the sharing economy field, Airbnb and
Uber, of course have imitators in China as well. (Uber officially stepped into the Chinese market
in 2014 whereas we have not officially begun operating in the market.) The only difference is
10 Similar to Tripadvisor in the U.S.
10
that the local version of Uber, DiDi, has gained around 70% of the market
share in China, whereas the local versions of Airbnb, Xiaozhu, Tujia, etc are still in the very
beginning of the fermentation stage. DiDi’s success indicates that most of the Chinese people
have accepted and agreed to the concept of the sharing economy; therefore, the market is already
open. We need to educate customers and cultivate their habits to get used to another style of
travel (and of living). Even though Xiaozhu and Tujia are direct local competitors in China in
terms of products, they are not strong even in the local market. Since we haven’t officially
moved into China’s local market, Xiaozhu and Tujia’s numbers of local housing are currently
more than our’s, but in terms of the outbound market, Airbnb is definitely the market leader. For
example, Tokyo was one of the top 3 cities that Chinese outbound travelers chose to visit in
2015. Airbnb has more than 6,500 housings listed in Tokyo in comparison with only 92 listed on
Tujia. In addition, we have 5 times more followers on Chinese social media than its local
competitors in total, demonstrating our relative brand awareness in China.
Challenges Facing Airbnb
Three major challenges facing Airbnb in China
We need to be prudent in establishing our business in China since the Chinese market is
large and complex. As such, as we move into China, we will first target outbound
Chinese travellers. After becoming familiar with and using our product, we will
encourage them to become opinion leaders, sharing their amazing living experiences and
stories with friends, which will in turn engage more local Chinese to become Airbnb
guests and hosts. However, based on our research, most of our primary target audiences
do not have their own living spaces in China. Especially in the most popular local travel
cities such as Shanghai and Beijing, many won’t be able to buy an apartment until they
are 40 years old. They either live with their parents or rent an apartment with friends.
Outbound Chinese travelers are more likely to become our guests than hosts, at least
initially. Since the age gap between hosts and guests is wider in China than in other
countries, in order to balance the number of guests and hosts, we need to make two
completely different strategies for the two groups of people.
11
Though Uber has opened the sharing economy in China, we need to put more effort
into educating customers and managing customers’ expectations towards our
products.
The biggest difference between Uber and Airbnb is the products. Uber provides a
standardized, mostly homogeneous product, which meets customers’ basic
needsto arrive at their destinationwhereas ours is a customized product, which
impacts a person’s travel and living experience. The two needs themselves reflect
the two completely different products.
On our website, the host posts information about their housing offerings including
pictures, descriptions, price, and so on. We are then able to use that information
and the reviews to manage customers’ expectations.
For customers who live in other countries with different culture backgrounds, we
have to cultivate customers’ habits and understanding towards shorttime rentals
and the concept of sharing their living space with others.
China has a completely different living environment than Western countries where
we have been developing really well. You can hardly find special places such as castle
or treehouse in China, and even if you could, the price would not be reasonable. There is
also no big difference in terms of living style and living experiences in different cities in
China, which works against our brand DNA. (See Figure 3)
Objectives and Strategies
Move fast to take over China’s market.
China is a huge market and every company wants to take the cake, but the truth is “no Internet
technology company has ever succeeded in China.” Not only does China’s unique political 11
environment lead to the failures, but also the powerful imitation skills. It is remarkable to see
how fast an Internet company can be copied, localized, and accepted by Chinese people. Even
11http://venturebeat.com/2016/03/25/ubersusingitsprofitsfromelsewheretosupportsustainablespendinginchinasaysceo/
12
though the government tries to drive people to be innovative, China’s
growth rate doesn’t require people to have time for creativity. Therefore, what they can do right
now is grab good idea and adapt it. Uber is trying to make the impossible possible. They have
been unofficially launched in the Chinese market for seven years. “Uber’s Chinese version” DiDi
came out 3 years later but quickly became the market leader in China, while Chinese people
hardly know Uber.” Unlike social media platform such as Facebook and Twitter that have been
prohibited by the Chinese government, Uber doesn’t face such political issues. Uber aggressively
started its formal market expansion in China in 2014. According to the latest report, the
company’s market share in China has grown quickly, rising from about 1 percent to 2 percent in
January 2015 to about 30 percent now. 12
As mentioned above, and based on the latest data showing that ride hailing apps have more than
2 million users in China , the concept of the sharing economy has been accepted by more and 13
more Chinese people and the market is ready for takeoff. In the hospitality sharing economy
space there are around twenty five imitators offering shortterm housing rentals in China (See 14
Figure 2). They want to become the next Chinese version of Airbnb; however, positively
speaking for us, the sharing economy in the hospitality space doesn’t have a market leader right
now. We must seize the moment. In addition, “on a global scale, Airbnb has an absolute
advantage over its Chinese rivals,” but to expand to China, we need to not only translate our 15
global advantages but also adjust our business model and marketing plan to China’s unique
characteristics.
We have begun our movement to China. Having recently raised $1.5 billion in investment from
China Broadband Capital and Sequoia Capital among others, we are planning to select a CEO for
our China operations with the help of those two Chinese venture capital firms. After 16
12http://venturebeat.com/2016/03/25/ubersusingitsprofitsfromelsewheretosupportsustainablespendinginchinasaysceo/ 13http://it.people.com.cn/n/2014/1118/c100926047387.html 14http://36kr.com/p/5043951.html 15http://www.businessinsider.com/threechallengesfacingairbnbinchina20158 16http://www.businessinsider.com/threechallengesfacingairbnbinchina20158
13
establishing a local team in China, our objective over the next three years
(from May 1st 2016 to May 1st 2019) is to gain 30% market share in the Chinese market within
the hospitality sharing economy, becoming the market leader in that sector. From the consumer
perspective, our objective is to get 45% of Chinese travelers to use Airbnb when they travel
either locally or abroad. We need to move fast and strategically to achieve this ambitious
goal.
3Year Strategies (From May 2016 to May 2019, based on importance)
S#1 Start by targeting outbound Chinese selfguided travelers, followed by local selfguided Chinese travelers, and reaching local Chinese hosts thereafter.
S#2 Localize all Airbnb products and services to culturally speak to the local market and address the mindset of the Chinese people.
S#3 Develop partnerships in the travel industry and sharing economy of shortterm rental industry.
S#4 Create and execute digital marketing strategy to reach 100 million Chinese travelers and achieve a 20% conversion rate.
S#5 Expand the host offerings by 30%.
Financial Objectives
Our financial objectives are based on the assumption that the Chinese market in the sharing
economy hospitality industry is currently worth $1.8 billion with a potential growth of 20% the
second year, followed by 30% the year after. The first year financial objective is to hold 1%
market share. The revenue business model is divided in two parts, ¼ of the revenue is generated
from hosts, and ¾ is generated from guests.
Years Year 1 Year 2 Year 3
Host Revenue (3% $ million) 4.5 54 210.5
Guest Revenue (9% $ million) 13.5 162 631.5
14
Total Revenue 18 216 842
Annual Objectives
Annual Brand Objective (From May 2016 to May 2017): Increase Airbnb’s guest market
share in China to 5%. From the guest perspective, comprised mostly of travelers, we aim to
reach 18 million travelers and have 3.6 million individuals sign up and use Airbnb.
Explanation of the numbers:
"How many travelers we need to reach to achieve this market share" = 1.2 billion "the
number of total Chinese travelers” x 30% "selfguided travelers percentage” x 5% “target
market share” x 20% “conversion rate”
Annual Financial Objectives: Achieve $18 million revenue in China.
Explanation of the numbers:
Based on the assumption that the Chinese market in the sharing economy hospitality
industry is worth $1.8 billion today, with a potential growth rate of 20% the second year,
followed by 30% the year after, the financial objective of the first year is to gain 1%
market share. Airbnb’s revenue model is divided into two parts: ¼ of the revenue is
generated from the hosts and ¾ is generated from the guests. The financial objective for
the first year is then to generate a revenue of $10 million with a market share of 1%.
Financial Objectives Year 1
Market Share 1%
Host Revenue (3%) 4,500,000
Guest Revenue (9% fee) 13,500,000
Total Revenue 18,000,000
Annual Tactics (From May 2016 to May 2017)
15
Our firstyear tactics will mainly focus on two key components. One is to
help solve the concern of trust and safety in order to lower the entrance barriers for both guests
and hosts on our marketplace. The other is to communicate the message about special travel
experiences in terms of being local, social and diverse, which are connected with Airbnb’s
emotional benefits.
Value
Proposition
Tactic Description
Success Matrix
Time Frame
Budget ($
million)
Trust & Safety
#1 Xiaozhu acquisition Y/N 05/01/1607/31/16
40
#2 Wechat Partnership Y/N 06/01/1608/31/16
0.2
#3 Financial company partnership
Y/N 06/01/1608/31/16
0.1
#4 Local team establishment Local teams in 10 cities
05/01/1608/31/16
5
Special Travel
Experience
#1
Travel website partnership
Reach 2.2 million travellers
06/01/1605/01/17
20
#2 Social influencer collaboration
10 million travelers
06/01/1608/31/16
12/01/1602/28/17
10
#3 Digital marketing campaign 5.8 million travelers
06/01/1608/31/16
12/01/1602/28/17
5
#4 Product localization Y/N 05/01/1605/01/17
10
#5 Travel credit incentive Reach 5 million travelers
Before each break time in
China
250
16
Total 18 million (tactics have
overlap
350.3
Trust & Safety
Tactic #1: Acquire Xiaozhu, one of Airbnb’s imitators in China, in order to get local data
and support.
Among all of the current imitators in China, Xiaozhu is the most explicit Airbnb imitator. Most
short term rental companies in China started in the sharing economy space around 2012. Some
have failed because the Chinese market was not ready to accept this new concept. Some have
changed their business models from C2C (like Airbnb) to B2C to solve the management and
security issues. Xiaozhu, established in 2012, has survived after 4year exploration in travel
industry and sharing economy of hospitality industry in China. Xiaozhu become recognized by
more and more Chinese selfguided travelers. For example, Xiaozhu has built local teams in each
city it operates to help search for available hosts and housings. They assist hosts by installing
antitheft locks at their homes and even help better organize the room to make it more attractive
to travelers. Xiaozhu now has more than 30,000 listings in around 200 cities in China. Since
being local, social, and diverse is our brand DNA, we will not change our C2C model.
Acquiring Xiaozhu will facilitate our move into the Chinese market, allowing us to obtain
local data as well as to build a strong local team who understands the cultural landscape.
Tactic #2: Partner with China’s biggest media platform—Wechat to help the ID
verification system.
The ID verification system is critical for users to trust Airbnb. Instead of asking users to input
their real name and national ID number, we will partner with Wechat, the biggest Chinese media
platform with more than 600 million Chinese users. Since Wechat has its own payment system,
in order to use Wechat Pay, users need to input their personal information and bank account
information, which means most of the Wechat users have already been verified. Once Airbnb
partners with Wechat, Airbnb’s users can login to the site via Wechat and choose whether to get
17
verified, giving them more credibility on the site. We would include
additional information about the benefits of getting verified to help users have a more successful
experience on our site. When they agree, Airbnb can simply extract users’ personal information
from Wechat’s database. Given the trust and safety concerns of the Chinese people, this
extra verification process will go a long way in making them feel more at ease when
transacting on the site as a user or guest.
Tactic #3: Partner with Ant Financial Services Group’s Sesame Credit to help build the
credit scoring system.
Airbnb’s exact imitator Xiaozhu has worked hard to solve users’ concerns about staying in a
stranger’s home. One of the ways they did this was by partnering with the online financial
service company Ant Financial Services Group. This financial service company, which belongs
to China’s biggest ecommerce company Alibaba Group, creates a credit scoring system for each
user. This credit scoring system acts as an additional level of screening since maintaining
good credit is important to Chinese people and would discourage negligent behavior on the
site. Furthermore, associating a person’s Airbnb ratings with their credit score would give
users additional confidence to interact on the site. The initial credit scoring system will be
based on users’ transaction history, but we will integrate more aspects such as ratings to better
improve the system over time.
Tactic #4: Establish local teams in the top 10 local travel destinations to find available
hosts and housing.
Based on our customer analysis, the average age of most potential hosts is above 35 years old.
Most are openminded and would be likely to accept the idea of opening up their home to a
stranger after better understanding the concept and becoming more familiar with it. Therefore,
we need to build local teams in the 10 most popular travel cities to search for available
housing, connect with owners, help solve safety issues and concerns, educate them to use
our products and also provide information such as how to get verified, how to become a
18
superhost, how to communicate with guests, etc. The skillset for each
team would include community outreach workers, photographers, decoration workers, and
perhaps designers.
Unique Travel Experience
Tactic #1: Partner with travel planning website to create awareness of Airbnb’s special
travel experiences.
Our research has shown that, in the beginning, cooperating with booking websiteseven though
they are our biggest competitors in the travel industryis not necessary. Most of our primary
target audience use travel planning websites to find reviews and suggestions. There are several
ways to spread the word about Airbnb on travel planning websites:
1. Ask Airbnb’s Chinese users to leave reviews on the planning website to earn travel credit
on Airbnb.
2. Automatically transfer reviews on Airbnb to planning websites with an agreement from
the user.
3. Set up an additional comments section on the planning websites to leave reviews about a
destination’s accommodation and living experiences.
4. Advertise Airbnb on the website.
We need to discuss the solutions with travel planning websites to ensure the mutual benefits. Our
goal is to reach 2 million local travelers and 200,000 outbound travelers. (2.2 million total)
Tactic #2: Collaborate with social influencers in the travel industry such as Molly and
Dabin to share inspirational content about the Airbnb experience.
We will collaborate with“social celebrities” with a certain number of followers on social media
such as Weibo and Wechat public account to influence our target customers. Using “social
celebrities” to advocate products is more effective at reaching our target audience than just
advertising on different media or using celebrity endorsements. We will incentivize key
influencers who are famous for selfguided travel to use Airbnb while traveling and create
content about the Airbnb experience to share with their social media followers. Our team will
19
also help to create posters, videos, and other content about the trip. This
tactic aims to reach 10 million customers. Most of our targeted media campaigns will be
conducted before holiday breaks.
Tactic #3: Develop digital marketing plan to build brand awareness in various popular
media platforms in China.
Our marketing team in China will write a local blog and generate creative, enticing, and inspiring
online content. We already have more than 10 million followers on Weibo. We will continue
posting about interesting Airbnb offerings, travel tips, and sharing unique, local
experiences. Most importantly, the marketing team will interact constantly with Airbnb’s
followers and turn 50% of our followers into actual product users (around 5.8 million). We
will focus on developing the digital marketing plan through using social media and videos.
Utilizing traditional media such as TV and magazine is another option, but we will only spend a
limited budget on other media platforms.
Tactic #4: Localize the Chinese Airbnb website and mobile app to appeal to locals.
We will not only hire professional translators to translate our website into Chinese (as an option
for outbound travelers who look at the site outside of China), but also will have the site switch to
a customized, Chinese version when a person looks at the site in China. For example, the current
Airbnb website shows listings in Boston and Philadelphia on the homepage as a default
recommendation. When users choose to translate to Chinese or go to Airbnb’s website in
China, Airbnb will recognize them as Chinese travelers. Instead of showing listings in
Boston, our website will recommend housing in the most popular travel cities for Chinese
travelers such as Tokyo, Hong Kong and Bangkok. It is necessary that the site not only be
written in Chinese, but also be localized to address the interests and concerns of the Chinese
market.
Tactic #5: Increase travel credit to guests and give discount code to hosts.
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While we don’t influence our users’ pricing in any way, in order to attract
more Chinese to join our marketplace, we will offer travel credit to users whose friends join
Airbnb and use the service as a guest or host. This travel credit can be used toward future travel
as a guest and will be applied toward the user’s next transaction on the platform. To be clear, the
host will still receive the same amount of money, but the guest will receive a discount from
Airbnb to be applied to their first stay following the successful onboarding of a friend to the
Airbnb community. We believe that this pricing strategy ties in well with our efforts to
mitigate trust and safety concerns, and effectively conforms with our brand DNA, since it is
a socially driven effort working in parallel with our strategy to identify ways to grow our
user base while addressing hesitations due to trust and safety. We will increase our $35
current travel credit to $50 in order to get more local Chinese travellers. The hosts can also get a
discount code from us to selfpromote their housings by giving the code to guests. Again, the
hosts will still get the same amount of money as listed and the guests will get a discounted price.
Risk Management
As with entry into any new market, there are a number of risks that we may face and are actively
working to mitigate.
Macroeconomic
There are always macroeconomic risks when entering a new market and China is no exception.
In order to reach our goal of achieving a guest market share of 5% in China, the economy needs
to be in a healthy enough state that the Chinese people have disposable income to use toward
travel. China is currently experiencing a unique economic period called the “New Normal” in
which economic growth has been slow, mainly due to changing industry trends and mounting
debt which has reached more than twice the size of the economy. While this downturn could
negatively impact Airbnb’s new entrant strategy and ability to acquire its market share goals, we
do not believe China’s “New Normal” will adversely affect our projections for two reasons.
Firstly, during this period of slow economic growth, the Chinese government is encouraging new
growth drivers less tied to debt, including services, consumer spending, and private
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entrepreneurship. The government’s backing in these areas, directly tied 17
to the health of the Chinese economy, gives us strong reason to believe that the slow economy is
of little negative concern to our plan. Moreover, though price isn’t our main value proposition,
our housing options inherently offer a wider range of pricing choices, many of which are more
economical than hotels, so even in an economic downturn or the Chinese “New Normal” with
slow economic growth and decreased consumer spending, we continue to believe that this
economic anomaly is not a serious concern for us and will not negatively impact our projections
and brand objectives.
Trust and Safety
A key learning from this past year has been that Chinese users are skeptical of offering their
home or staying in the home of a stranger. Since the sharing economy in the hospitality space is
still a relatively new concept in China, they need to be encouraged by safety procedures and their
network of friends and acquaintances in order to overcome the mental barriers associated with
the trust and safety. Our objective to gain market share in the Chinese market is contingent upon
successfully alleviating these fears. We have aligned a number of our tactics around this issue in
order to address this concern for future guests and hosts. First, our partnership with Wechat,
China’s biggest media platform, will allow us to leverage their ID verification system and
provide an additional level of security for Airbnb users. Secondly, we our partnership with Ant
Financial Services Group’s Sesame Credit will help build the credit scoring system and offer
another level of security to our marketplace. Furthermore, our promotional strategy of offering
users a credit to use toward future travel when friends sign up and use Airbnb as a guest or host
will serve to further eliminate the roadblocks associated with trust and safety. In addition to these
tactics, to ensure that these concerns do not serve as a barrier to our growth strategy and
objectives, we will incorporate trust and safety in our messaging through all marketing vehicles.
We believe that the concept of trust within the sharing economy in the hospitality sector is one
that is increasing in a positive way in terms of awareness and perception. Between our efforts
17 http://www.wsj.com/articles/theworldstrugglestoadjusttochinasnewnormal1440552939
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and the efforts of other players in the market, consumers will continue to
become more comfortable with the concept which will further encourage new customers.
Competition
China has two distinct types of Airbnb competitors: those who imitate the concept directly and
those who offer a completely different model that competes with Airbnb. We believe that our
robust, triedandtrue marketplace which successfully operates in 190 countries is superior to any
competitor who tries to imitate the concept directly. To mitigate the risk that a competitor will
directly and successfully copy our platform, we plan to take two distinct actions: acquire
Xiaozhu and localize the Chinese Airbnb website and mobile app. Xiaozhu, established in 2012,
is one of Airbnb’s biggest imitators in China. Though they are still small in comparison to
Airbnb, they have a sizeable database of local travelers and hosts and have built an infrastructure
dedicated to alleviating fears associated with trust and safety concerns. We feel that acquiring
Xiaozhu will allow us to leverage the infrastructure they have built while allowing us access to
local data and support that we feel will uniquely position us to successfully compete with other
local imitators that may arise. Furthermore, we plan to further weaken the risks associated with
imitators by localizing the Chinese Airbnb website and mobile app to allay any advantage these
imitators may have and to incorporate features that the Chinese market expects to see.
Success Matrix
The Xiaozhu acquisition, Wechat partnership, local team establishment, and product localization
are mandatory moves in order to be able to satisfy the market’s pressuring need of product
localization to the complex Chinese market.
The financial company partnership would occur if the Wechat Partnership attains the 6 months
objectives assigned to it. Travel website partnership will take place if we reach 2.2 million
travellers, while the social influencer collaboration will take place after reaching 10 million
travelers. The digital marketing campaign would take place after reaching 5.8 million travelers
The travel credit incentive would occur after reaching 5 million travelers.
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Investment Thesis
Right team: Hire a local team in the most popular cities in China
Right time: The sharing economy is currently rising, and competitors in China are growing; it is
the perfect timing to expand to the Chinese market
Right plan: The Chinese market is promising, with specificities that must be taken into
consideration within a specific localized plan. We have raised $1.5 billion from Chinese
investors, two strategic partners — China Broadband Capital (CBC) and Sequoia China,
Hillhouse, Horizon Ventures, and GGV Capital to be advised by local venture capitalists on how
to adapt to sell to Chinese travellers.
Next Steps
After the 3 year expansion in China, once we achieve the market leader position, we will play
defense to the other imitators such as Tujia and Youtianxia who are utilizing the B2C business
model. We will try to acquire the rest of imitators who use the same C2C business model as us to
make sure there are no potential growth and competitors in this niche market. Our efforts will
remain dedicated to be the trust and safety issues and our strategies will revolve around
encouraging hosts by educating them on the safety measures we currently offer, as well as
developing and executing new, marketspecific measures that serve to further assure our target
market. As the Chinese population becomes more familiar with the Airbnb brand image as well
as the sharing economy on a whole, there are endless opportunities to build out this market
which we will more actively address in the future. China will become our main market in 2020.
Airbnb will make huge profit from this market after the 3year expansion. We want our Chinese
customers to feel like they “belong everywhere”.
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MKT Brief
1. Brief background of the company and brand (product and/or service) you offer.
We are the pioneer and market leader within the hospitality sharing economy industry, averaging
425,000 guests per night and more than 155 million guest stays annually. We offer customers 18
“the world at your fingertips.” Our personality can be described as an adventurous, openminded,
male millennial wanting to experience other cultures while meeting new people and having an
off the beaten path travel experience. At the core of our value proposition is cheaper listings,
listings in different and more attractive neighborhoods, and the diversity of our offerings.
Corroborating these benefits are the emotional benefits of the brand, which include offering an
experience which allows customers to “live like a local” in a setting that is homelike, special,
and provides a social, intercultural interaction. We are opening up the world, one spare bed at a
time, and the market awaits us in China.
2. Reasons and objectives for marketing brief.
The purpose of this brief is to expand our global reach by gaining 30% market share within the
hospitality sharing economy space in the Chinese market, becoming the market leader there.
3. Communication objectives.
Our communication objectives are centered around conveying trust and ease, the two biggest
pain points in engaging the Chinese traveler. Our goal is to to encourage Chinese travelers to use
Airbnb for their travel experiences. Since 70% of Chinese travelers are selfguided and rely on
advice from their peers when booking travel, our messaging will alleviate fears they may have in
using Airbnb when traveling or opening up their home as a host. We also want to engage the
local community to be hosts and guests and will devise messaging to reach this segment as well.
4. Target market.
Our target market is Chinese millennials who enjoy selfguided, local and international travel.
18https://www.pwc.com/us/en/technology/publications/assets/pwcconsumerintelligenceseriesthesharingeconomy.pdf
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5. Execution plan.
Our marketing vehicles include engaging in social media marketing, developing relationships
with influencers and brand ambassadors, building local strategic partnerships, and
localizing/optimizing the Chinese Airbnb website and mobile app to appeal to the Chinese
traveler.
6. Marketing deliverable.
We need clear and consistent messaging across all of our marketing efforts listed above. We will
need a mockup of the localized Chinese Airbnb website written in Mandarin and optimized for
the Chinese traveler and host, including suggesting locations on the homepage that appeal to the
Chinese traveler and including tips that are helpful for a first time Chinese Airbnb user.
7. Mandatories.
The marketing deliverables must have a high emphasis on safety and security so as to address
and mitigate common fears in participating in the sharing economy and facilitating the
onboarding process.
8. Timeline considerations.
Our intention is to launch the marketing initiative as soon as the deliverables are ready. We
expect the messaging and website mockup to be developed within a couple of weeks, at which
point we can begin our marketing campaigns.
9. Tracking and goals.
We will track two separate goals: (a) guests (Chinese travelers) (b) listings/hosts. For guests, we
will track how many Chinese travelers we are attracting to the site, with the goal to gain 5%
market share within the first year, 20% within the second year, and 45% within the third year. On
the host side, we will track how many new listings have been created in China with the goal of
attracting 1% in the first year, 10% in the second year, and 30% in the third year.
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We will track our goals accordingly with our strategies, outlined below:
S#1 Start by targeting outbound Chinese selfguided travelers, followed by local selfguided Chinese travelers, and reaching local Chinese hosts thereafter.
S#2 Localize all Airbnb products and services to culturally speak to the local market and address the mindset of the Chinese people.
S#3 Develop partnerships in the travel industry and sharing economy of shortterm rental industry.
S#4 Create and execute digital marketing strategy to reach 100 million Chinese travelers and achieve a 20% conversion rate.
S#5 Expand the host offerings by 30%.
10. Budget.
Having just raised $1.5 billion from Chinese investors, we have a strong base to carry out our
marketing objectives and a healthy lead from our closest competitor, Tujia.com, which is valued
at just over $1 billion and raised $250 million in its latest funding round in June 2015.
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Appendix
Figure 1
Figure 2
Listings are local companies beyond or in the A round. Other 16 companies are in the seed stage or preA
round. Among those similar competitors, Xiaozhu’s products are the most alike as Airbnb and Tujia gets
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the most market share currently. The last five columns show the number of
housings in the most popular travel cities among Chinese outbound travelers. Airbnb’s listings are the
most in each cities.
Figure 3
Areas Western Countries China
Style (Exterior) Diverse accommodations Similar accommodations
Locations Diverse locations Centralized places
Price (in comparison to
hotel)
Costefficient/pricefriendly
Almost the same, sometimes even more
expensive
Experience Specialized Lowquality
The housings in most western countries match tightly with Airbnb’s emotional benefits. Airbnb needs to
put more effort into finding out the right products which reflect its brand DNA.
Figure 4
Years Year1 Year2 Year3
Market share (listings/hosts)
1%
10%
30%
Market share (guests)
5%
20%
45%
Airbnb’s annual objectives in terms of market share in listings and guests
Figure 5
S#1 Start by targeting 18 million outbound Chinese selfguided travelers, followed by local selfguided Chinese travelers, and reaching local Chinese hosts thereafter.
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S#2 Localize all Airbnb products and services to culturally speak to the local market and address the mindset of the Chinese people to have 3.6 million new sign up.
S#3 Develop 3 partnerships in the travel industry and sharing economy of shortterm rental industry.
S#4 Create and execute digital marketing strategy to reach 100 million Chinese travelers and achieve a 20% conversion rate.
S#5 Expand the host offerings by 30%.
Figure 6
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Basic data about Airbnb in the global market.
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Figure 7 :
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