China is a tough nut to crack, no matter how much money U.S.-based companies have to throw at it.
That’s the overarching takeaway tonight, given the news — first reported by Bloomberg — that Hong Ge is abandoning his post as the head of Airbnb’s China business for a new, as-yet-undisclosed opportunity.
Why does the departure matter? For starters, Ge was appointed to the role just four months ago. Further, Bloomberg says the company had struggled since 2015 to recruit a business chief, finally turning within and hiring Ge. He’d originally joined the company at its Bay Area headquarters last year, and earlier spent more than four years at both Facebook and Google as an engineer.
Kum Hong Siew, the current president of China operations, will take over the role in an interim capacity. Last week, the company also announced that co-founder Nathan Blecharczyk would become chairman of Airbnb’s China arm, spending half his time on business there and making monthly trips to the country from the U.S.
Airbnb, which goes by the name of Aibiying (it means “welcome each other with love”), faces fierce competition from local startups, including Tujia.com, which is backed by China’s largest online travel agent, and fast-growing Xiaozhu.com.
All are further dealing with tough regulatory challenges in China, where movement between cities is watched closely and people must register temporary stays with local police.
We were unable to reach Ge for comment for this story, but this looks like a setback on its face. Wrote Airbnb said in a statement to Bloomberg in June, at the time of Ge’s hiring, “Hong has unparalleled knowledge of our product and what it needs to be in China, combining a deep technical expertise with an understanding of the local market.”
Airbnb isn’t the first U.S. company to struggle to get a stronghold in China, of course. As many will recall, Uber backed out of the country roughly a year ago, after losing $1 billion a year in China and battling a profitable local competitor in Didi Chuxing for market share.
Indeed, after burning up $2 billion, Uber agreed to sell its Chinese business to Didi.
More than 80 percent of Airbnb’s users in China are under 35, a greater percentage than in any other country, the company said in March when it changed its name to win over the Chinese market.
Local millennials were apparently not impressed, however. As Quartz noted, soon after Airbnb posted a promotional video about the name change on the microblogging platform Weibo, bloggers weighed in — and not with compliments.
“It sounds so horrible. Please tell your boss about that,” wrote one. Wrote another: “You guys need a Chinese-language consultant.”
Featured Image: Carl Court/Getty Images
Published at Tue, 24 Oct 2017 05:58:06 +0000