According to the Annual Report on The Development of China’s Sharing Economy (2018) released by the State Information Center, the market turnover of China’s sharing economy in 2017 was about 4,920.5 billion yuan, an increase of 47.2 percent over the previous year. The strong momentum of sharing economy is also spreading from first-tier cities to second and third-tier cities. Mobike, Ofo, Harrow Bike, etc. set off a sharing frenzy in Beijing, Shanghai, Guangzhou and Shenzhen, and then started to move to more second – and third-tier cities. Shared charging banks such as street TV, dial TV and small TV are also expanding to second – and third-tier cities.

It shows that the sharing field is gradually forming a market expansion trend with first-tier cities as the center and gradually radiating outward. The online short-term rental industry, which is also a sharing field, is also closely following the trend of urban subsidence. “Scale is very important for the sharing economy,” Chen Chi, founder and CEO of Xiaozhu, said at the Boao Sub-forum titled “Sharing Economy: From capital To The Nature of Business.” Similarly, for short-term rental sharing, if you want to get bigger, you have to shift the focus of battle from first-tier cities to more second – and third-tier cities.

Second – and third-tier cities will become the new battleground of online short-term rental industry

The reason why unicorns in the online short-term rental industry, such as Xiaozhu, see the sinking trend of the sharing economy is that they explore the development essence of space sharing from the development status of the sharing economy.

On the one hand, traffic congestion and overpopulated first-tier cities have been criticized, and people are Shouting “escape from Beijing, Shanghai and Guangzhou”, which means that first-tier cities are expanding their travel and accommodation needs, while more and more second – and third-tier cities have become the most popular destination of home stay.

In terms of city popularity, first-tier cities have become the old favorites of tenants, while new first-tier and second – and third-tier cities have become new favorites. According to the 2017 Big Data Research Report released by Xiaozhu, Chongqing is the most popular city for tenants, followed by Kunming and Lijiang. New first-tier cities such as Chongqing, Nanjing and second – and third-tier cities such as Kunming and Lijiang are not seen in the top 10.

In terms of supply and demand, first-tier cities still account for a large proportion but their growth rate tends to be stable, while the growth rate of new first-tier and second-tier cities keeps rising. According to the data, Tianjin recorded 700% year-on-year increase in orders, Chongqing 520%, changsha, Kunming and other cities are also far faster than Beijing, Shanghai and Guangzhou; New first-tier and second-tier cities account for 44.6% of the total number of stay days, which is close to 47.3% of first-tier cities. The vacancy rate of housing in China is over 20%, and the vacant housing supply is mostly concentrated in non-first-tier cities. For example, the seasonal vacancy rate of commercial housing in Hainan province is as high as 70%, and the vacancy rate in Sanya even reaches 80%.

On the other hand, with the rise of the new middle class, there are more and more middle class in non-first-tier cities, and their consumption demand is gradually rising. The upgrading of consumption demand also promotes users’ demand for fresh accommodation such as short-term rental sharing. Relative to the fast pace of a line of the urban middle class, generally in the rich to the present situation of consumption desire but don’t time, two or three line city’s new middle class is at the time of dual flush with money in good condition, the mining of this kind of new middle group for flat Taiwan side were also more likely to consumer demand, the user’s consumption frequency is also more.

Iresearch data shows that 79.1% of online short-term rental users have a bachelor’s degree, more than 50% of users are ordinary employees and general managers of enterprises, and more than 60% of users have a monthly income between 10001-20000. According to data released by Xiaozhu, the highest spending by tenants was 58,000 yuan in 2015, 89,400 yuan in 2016, and 210,000 yuan in 2017. It shows that the new middle class is the main consumer group of online short-term rental, and the consumption level is rising year by year.

In addition, policy support has also played a positive role in promoting the development of sharing economy in second – and third-tier cities. Since 2017, relevant policies issued by the Ministry of Housing and Urban-Rural Development, the Ministry of Land and Urban-rural Development, the National Development and Reform Commission, the National Tourism Administration and other ministries and commissions have involved housing supply, land supply, tourism b&B development and other related content, so as to promote the rapid development of housing sharing.

According to the Annual Report on The Development of China’s Sharing Economy (2018) released by the State Information Center, statistics released in April 2017 show that leisure agriculture and rural tourism in China received nearly 2.1 billion tourists, generated revenue of more than 570 billion yuan, employed 8.45 million people and benefited 6.72 million rural households. The government is also vigorously promoting rural development, and the local conditions of rural areas can better meet the personalized accommodation needs of users of online short-term rental platforms. In the future, the scope of cooperation can be expanded on the basis of home-stay sharing, such as the development of rural food, sightseeing agriculture, experience agriculture, etc.

At present, how to seize the opportunity of online short-term rental platform?

Rise of new middle, high enthusiasm of consumption upgrade, abandoned the first-tier cities this old love turned to second – and third-tier cities, as well as the policy of good presages a Shared economic sinking is the trend of The Times, in reality, the pig short rent represented online short industry the head platform to would like to open speakers have to gain, adjust measures to local conditions.

First, to improve the quality of short-term rental services in second – and third-tier cities, not only for tenants, but also for landlords. Although the concept of sharing is more and more accepted by people and more and more people’s attention, online short-term rental, such as personalized forms of space sharing is becoming more and more popular. However, as online short-term rental is non-standard accommodation, compared with the standardized traditional accommodation industry, the biggest difference lies in the service before, during and after the accommodation. However, non-standard accommodation accounts for a very small market share of large accommodation, so it is more conducive to the beach accommodation market to improve service quality and move towards standardized accommodation services.

For guests, online short-term rental is slightly more expensive than ordinary standardized accommodation because of its personalized accommodation advantages, and the accommodation convenience is not as convenient as the price of fast hotels. For landlords, most of the houses are their private residences, and most of the tenants are not willing to take the initiative to clean the house after moving in, and the landlords do not want to increase the cost of cleaning, so it is necessary to improve the service such as pick-up and sanitation. For example, Xiaozhu’s housekeeper provides professional cleaning service for the landlord through crowdsourcing cooperation mode, and restores the house to be exactly the same as the photos of the house source.

On the one hand, there are services such as pick-up and sanitation so that tenants can stay more comfortable, but also let the landlord save the trouble and cost of sanitation; Second, the improvement of service quality not only makes up for the short board of online short-term rental non-standard accommodation, but also improves the platform’s good reputation among landlords and tenants, and is more conducive to enhancing its competitiveness.

Second, establish a complete credit system in second – and third-tier cities to win the mutual trust between tenants and landlords. On the one hand, the quality of the housing is uneven. The information provided by the landlord is inconsistent with reality, which brings a psychological gap to the tenants. On the other hand, most landlords will release housing information on multiple platforms, which increases the supervision difficulty for the platform and easily leads to the situation that the tenants have no house to live in when they move in.

In addition, the elastic supply and demand of housing supply is insufficient, and it is difficult to balance the supply and demand difference between peak tourism season and low tourism season. Moreover, the situation of temporary check-out and intentional or unintentional damage to the items in the house also occurs from time to time, which will increase the burden of the platform. Therefore, the establishment of a complete credit system can not only reduce the losses that landlords may face, but also protect the interests of tenants, and reduce the risk of additional losses borne by the platform.

Platforms can start from infrastructure equipment, insurance claims, big data and other aspects to create a complete credit system. For example, professional photographers are provided to landlords to take real house photos, smart locks are installed for landlords, tenants can check in with their faces, home property insurance and accident insurance are purchased, and credit systems are jointly built with banks, Alipay and financial institutions. Xiaozhu, for example, is deepening its cooperation with Ant Financial. It has teamed up with Sesame Credit to launch an “escort free” campaign and provide landlords with the service of installing smart door locks.

Third, diversified business expansion, jump out of leisure travel such routine business. While leisure travel is still a major driver of the lodging industry and a major source of revenue for online short-term rental platforms, the demand in this sector is becoming saturated and competitive. With the rise of the new middle class, the level of consumption has improved, and the demand for accommodation has become more and more diversified. The demand for accommodation for business trips, examinations, job hunting, medical treatment and parties is also increasing gradually. Online short-term rental users have more and more diversified choice of house type, inn, farmhouse, villa, duplex are optional category.

Therefore, online short-term rental platforms can open their minds and expand all kinds of accommodation modes. For example, Xiaozhu launched “City Lights” bookstore accommodation plan, but also to provide greenhouse, theater and other personalized accommodation space; Another example is to cooperate with real estate companies in second – and third-tier cities to develop hardcover houses for medium – and long-term rent. Many real estate developers in the second – and third-tier cities are difficult to sell real estate projects, and the increase in the demand for accommodation such as job hunting, medical treatment and examination can make online short-term rental platforms and real estate developers to cooperate, let the real estate developers put part of the vacant house packaging on the online short-term rental platform for rent.

On the one hand, the demand for accommodation such as job hunting and medical treatment tends to be medium – and long-term accommodation, which is highly mobile. After the decoration of idle houses, the tenants can not only live in the new houses, but also choose a variety of styles of housing, but also revitalize the idle houses of real estate developers to increase their income. On the other hand, since the real estate developers are responsible for the house decoration themselves, the online short-term rental platform saves the high cost and focuses on the operation of improving the economic benefits of both parties.

Second – and third-tier cities have become the key to sharing economy: the one who gets the initiative wins the world

It is foreseeable that under the general trend of consumption upgrading and the increasing embrace of the new economy in various regions, the sharing economy will sink faster, and the second – and third-tier cities will gradually embrace a new blue sea just like first-tier cities.

On the one hand, compared with first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, the user scale of second-tier cities will become a solid foundation for the blue ocean. On the other hand, on the basis of a guaranteed number of users, diversified users in the market will also stimulate many potential demands.

But the new blue ocean also means sharing economy companies need to have stronger action and execution. In terms of online short-term rental industry, Xiaozhu has the confidence to target second – and third-tier cities first with its service system and service experience advantage. The development of the sharing economy in the past few years has taught us one thing: first mover advantage has a huge say. Quite simply, first mover advantage is a fulcrum where infrastructure and user habits are rapidly cultivated. In the case of seizing the first-tier cities, the second and third-tier cities, is undoubtedly the best choice to consolidate their own strength.

In general, the sinking of the sharing economy is an objective manifestation of the potential market. With the promotion of the sharing economy, the market of the second and third-tier cities will have more space for development in the future. Whoever can take the lead in establishing a firm foothold in second – and third-tier cities is most likely to become the biggest winner of the sharing economy in the future.

Article/Liu Kuang public account, ID: Liukuang110