American tech companies have prevailed the entire world, but it’s been hard for these companies to crack the Chinese market. Ebay lost its battle against Alibaba more than 10 years ago; Amazon entered China in 2004 but it’s still not popular among Chinese; most recently, after one-year price war against its local rival, Uber sold its China operations in the early August 2016.
With so many failure cases, it’s no surprise that airbnb wants “to be prudent in establishing business there” (source: airbnb blog). Since its entry to Chinese market in 2015, airbnb has been keeping a low-profile and even though 1 year has passed, the local users still see few changes in their website. So what problems will they encounter when they localize their product in China?
In this article, I’m going to discuss the difference in searching for rentals between airbnb.cn and one of its local competitors — xiaozhu.com and talk about how the cultures, social factors and even the languages impact the product design. This article could be helpful for those who are designing for diverse users with different culture backgrounds, as well as the companies who are considering how to localize their products in other markets.
A Design Difference Between The Two Websites
A major issue that all short-term rental business should always consider is how to help users search for apartments more efficiently. Airbnb did a very good job for western users (and most designs are also very helpful for eastern users), they provide a wide range of detailed filters to satisfy people’s different needs.
Xiaozhu.com was founded in 2012 in China, from the website design to the business, it’s an exact copy of airbnb. The C2C (Copy to China) Chinese entrepreneurs never stop looking for new opportunities from the western world, however, they don’t copy blindly. A good example is that xiaozhu’s location searching is superior to airbnb’s from a Chinese’ perspective, it allows users to search in 7 ways: administrative district, subway, bus stations & airports, commercial centers, tourist spots, universities and hospitals. While in airbnb, users only search by neighborhood.
I’ll explain why xiaozhu’s design is more inline with Chinese habits and talk about 4 of the filters which I think are the most important: administrative district, subway, commercial center and hospital.
- Administrative District
This is the first filter offered by xiaozhu. The cities in US are split into “neighborhoods”, depending on the area, a neighborhood could be business-oriented, entertainment-oriented, or just a pure residential area. But in Chinese, the word “neighborhood”(“社区”or“小区”or“居住区”) only refers to a small residential community which consists of an apartment complex and several units of 100~600 families (source: Wikipedia). Chinese neighborhoods don’t offer business or entertainment (but there may be some small grocery stores), they’re only living space and are not well known at all, nobody cares where a neighborhood is except for those who actually live there.
Instead of “neighborhood”, cities in China are divided into “administrative districts”. These districts have the exact same functions as US neighborhoods, but the problem is an “administrative district” is often too large. Take Chicago and Shanghai as an example. Chicago has 77 neighborhoods with each one scales 27.6 sq. mi. in average, but Shanghai has only 19 administrative districts and averagely, each district is around 143 sq. mi., that’s almost 5 neighborhoods in total.
In US, the relatively small acreage of a “neighborhood” makes the word appropriate enough to describe an area, not to mention there’re probably some culture, social or historic characteristics making a neighborhood much more distinguishable.
In contrast, the Chinese’ concept of “administrative district” is often so large that people still need additional information to locate a specific area, such as subway station, or commercial center. The living situations -- rental price, security level, education level -- of different parts within a same district may also vary a lot. This is the reason that xiaozhu provides a lot more filters besides “administrative district”.
Subway plays an important role in almost all the major cities around the world, this is especially true for Shanghai. After developing for more than 2 decades, Shanghai’s subway system became the world’s largest rapid transit system by route length and second largest by number of stations (14 lines and 364 stations) (source: Wikipedia). The daily ridership of Shanghai subway in October 2016 was 9.16 million, accounting for 51.8% of the public transportation (source: Shanghai Municipal Transportation Commission). Comparing to 5.6 million daily ridership in New York (source: mta.info) and 779 thousand daily ridership in Chicago (source: Chicago Transit Authority), that’s a huge number.
The low level of car ownership makes subway even more popular among not only the natives, but also tourists. By the end of 2015, the ownership of cars in Shanghai is about 2.8 million (source: Shanghai Automative Trade Association), while the population is estimated to be 24.15 million (source: World Population Review), only 1.2 vehicles available per 10 people. In Chicago, the data is around 5.5 (source: Governing Magazine).
As you can imagine, people’s daily commute relies heavily on public transportation. Easy access to public transportation is one of the major factors that influence people’s decisions on where to stay during a trip, and subway station is a perfect filter (and perhaps a key filter) for location searching.
- Commercial Centers
The 4th filter that xiaozhu.com offers is the “Commercial Centers”. A “Commercial district” is “any part of a city or town in which the primary land use is commercial activities (shops, offices, theaters, restaurants and so on), as opposed to a residential neighborhood, and industrial zone, or other types of neighborhoods.”(source: Wikipedia).
This definition is definitely correct for both China and US, but there’re two major differences. The first difference is the number. Downtown area is perhaps the only major commercial center in US cities, but in China there’re a lot more. Shanghai released a commercial network plan draft in 2014 , this draft is used as a guidance for city construction during 2013~2020, the government stated that “we’re still constructing the three-level commercial network system which consists of city-level commercial center, region-level commercial center, and community-level commercial center”, under this guidance, they further announced 60 commercial centers: 10 for city-level and 50 for region-level (source: Shanghai Municipal Commission of Commerce).
The second difference is the scale of secondary commercial centers. Both US and China have central business districts in large cities. Outside CBD, US cities may have several other business districts with a relatively small scale and more specialized functions. But in China, secondary commercial centers (here I mean the “region-level commercial centers” according to the government) are also in very large scale which makes them pretty well-known, some of them may even exceed the city-level commercial centers.
Both city-level and region-level commercial centers work pretty well for searching for rentals, and with so many of them spread out across the city, people can locate a place fairly easily (just imagine there’re 60 famous neighborhoods in the city). For example, If someone wants to stay near downtown, he could find a place within a city-level commercial center such as “Middle Huaihai Rd”. On the other hand, if he wants to save some money, he’ll probably choose to stay near a region-level business center which could be in the suburb, such as “Minhang”.
The most unexpected filter here is perhaps the “hospital”, at the first glance, it doesn’t make sense at all, why people want to search by hospitals in a short-term rental website?
Last year, Shanghai received around 265 million patients (source: Shanghai Municipal Commission of Health and Family Planning), remember the population of Shanghai is estimated to be 24.15 million (source: World Population Review), while there’s no accurate data, it’s quite obvious that a large number of the patients are not from Shanghai city.
There’s actually a very severe social issue behind this phenomenon: the distribution of medical resources in China is extremely uneven. The China Statistical Yearbook 2014 showed that the first tier cities Beijing and Shanghai have more than 10 medical technicians in per 1000 persons, however, among the 31 recorded cities, 12 cities only had 3~4 technicians. This situation is even worse when comparing cities and rural areas (source: Medical Technical Personnel in Health Care Institutions per 1000 Persons).
In China, the cities -- especially the first tier cities -- have the best medical equipments, the best doctors and the best nurses. Rural people may go to their local hospitals if they only have a minor disease, but if they are diagnosed with severe problems, they will have to go to city hospitals. Further more, if they’ve got something which may threaten their lives, going to the first tier cities will be their best choice (and often times it’s their only choice, if they could afford it).
This is why “hospital” is a very important filter for short-term rental. If someone goes to Shanghai for medical care, his companion will need a place to stay overnight, and it’s better to stay close to the hospitals, with the huge population in China, this market is very attractive.
To conclude, here are the major differences between China and US that lead to different design considerations:
- The large acreage of an administrative district in China means additional searching information is needed.
- The low levels of car ownership in China means access to public transportation is very important.
- The numerous commercial centers in Chinese cities can help tourists to locate a place quite easily.
- Other issues that result in Chinese users’ specific needs such as unevenly distributed medical resources.
This article only shows how Airbnb’s local competitor made their website easier to use for Chinese through a modification in design, and in fact there’re still a lot to talk about. Western companies not only face the regulation problems, they also need to invest a lot more time understanding the Chinese community in order to succeed in the market.