China is embracing the “sharing economy” with great vigor, but the practice of using online formats to seek rides, book accommodation and do other activities outside of traditional channels is not without its share of growing pains.

It seems some “peer-to-peer”sites are exactly peerless.

Hugo, a host on the lodging-rental website Airbnb and a China contributor to the Lonely Planet travel books, has found that out the hard way. He used to think he was pretty up-to-date with all facets of tourism, but then he encountered the convoluted payment system on Airbnb.

Chinese people have to use PayPal to finish Airbnb deals,î said Hugo, who is based in the southern city of Fuzhou, Fujian Province and declined to give his surname. ìIt forces us to wait and sometimes we never get a payment.

Hugo’s experiences highlights the problem that overseas dotcom startups have penetrating the Chinese market, where the world’s biggest Internet population lives.

Airbnb and ride-hailing service Uber have become very popular in China’s sharing economy.

But the challenges they face here are similar to those encountered by the likes of Google and eBay a decade ago. Airbnb is an online service that matches people wishing to rent out all or part of their homes with visitors seeking accommodation that is reasonably priced or more personal in nature. The site, which was founded in San Francisco in 2008, attracted more than 17 million travelers globally in the May-August summer season, more than double the number a year earlier.

The site tries to meet customized tourist requests, like Old Shanghai-style houses from the 1930s or a siheyuan, a type of courtyard residence typical of Beijing. It allows people to find places to stay during the peak seasons, such as the weeklong National Day holiday that begins on October 1, when hotel rooms are hard to come by. It offers overseas tourists the chance to meet locals and see how they live.

Recently, Airbnb forged a partnership with investment firms Sequoia China and China Broadband Capital, which helped account for US$1.5 billion of investment in August, to find a chief executive officer for its China operations and to widen its footprint here.

The strategy is based on strong prospects. The number of outbound Chinese travelers using Airbnb services grew 700 percent in 2014.

“We are a global travel network, so if a Chinese person wants to travel the world, we are all over the world,”Airbnb CEO Brian Chesky told the media.

Airbnb and Uber, which just raised US$1.2 billion for its China business, are stars in the emerging sharing economy, which is changing the way people travel.

Airbnb’s new Chinese partners have helped address Hugoís problem. Chinese tourists and hosts can now use Alibabaís Alipay for deals on the Chinese mainland, a much easier channel to navigate than PayPal, according to Airbnb China’s website.

However, Hugo seemed surprised when told that news recently.

“I would have assumed that all China hosts were informed of this,”he said.

Accommodation bookers, too, have gripes.

In April, Calgary-based Airbnb hosts were told that four people would be staying at their home over a three-day weekend. But neighbors reported seeing a party bus roll up the first evening. Star and Mark King, the home’s owners, found the property “trashed” when they came back. Police, who received several noise complaints from the home during the weekend, estimated that between US$50,000 and US$70,000 worth of damage had been done, according to reports.

Airbnb fined the offending users and banned their accounts. It also reimbursed the Stars.

In China, no such reimbursements have been made public, though many users and hosts have complained online.

Vivi Zhang, a Shanghai woman working for an IT firm, booked a room through Airbnb on a trip to Taiwan in June.

When she got there, she found the room looked nothing like the pictures online.

“It was a disaster,” she said. “There was only one big bed in an empty room.”


Though she had paid for the room, she didn’t stay there. And she couldn’t give her dour rating of the experience on Airbnb because that part of the website was too difficult to use, she said.


Indeed, Airbnb’s rating system is pretty complicated and user unfriendly, according to an informal survey by Shanghai Daily.

Hoya, an experienced tourist and a Getty photographer, said he had a strange experience when he browsed Airbnb China looking for a room in the northwestern city of Urumqi for August. He said a male host only accepted female tourists as roommates for “English practice.”


“Only women for English practice?”Hoya asked suspiciously.

Shanghai-based Hoya also said he found a bed in a dormitory through Airbnb during a visit to India. The accommodation gave him the heebie-jeebies, he said.

"There was no registration, no lockers and no safety,"he said. "And you werenít quite sure of the people you did meet."


Security is always a top concern in the sharing economy. You need to know who you are sharing with to feel safe. There have been media reports of female passengers raped by Uber drivers in overseas countries. Some prostitutes have camouflaged themselves on Airbnb to rent rooms in New York City, according to the New York Times.


Between May and August, Airbnb's growth in Asia helped make this summer the best in the online site's short history. China is one of the fastest-growing markets in terms of travelers booking stays outside their home country, the company said recently.


History tells us that foreign Internet companies expanding into China always run into problems, largely created by unfamiliarity with the market.


The lessons span a long list of names, including Google, eBay and Amazon. Facebook and Twitter are not even yet allowed on the Chinese mainland.


"It's never a localization process,î said Derek Shen, president of LinkedIn China, talking his companyís experience. ìYou have to form an entirely new Chinese firm."


LinkedIn, a business-oriented social networking platform, directly released the new mobile application Chitu specifically for China instead of expanding LinkedIn's Chinese-language application.


Airbnb still recommends people log in through email or social media accounts for its China iPhone application. It suggests using accounts that arenít even available on the mainland.


Normally, Chinese consumers register and log in through mobile numbers, a practice adopted by Chinese Internet giants like Baidu, Alibaba and Tencent.


Insurance is another problem for Airbnb. "I checked the insurance issue before deciding whether to post our design studio on the website,"said Shanghai-based South Korean designer Vandy Han. "It doesnít cover China."


For Uber, the accuracy of routes and response times are also concerns in the domestic market.

"It's difficult and slow to find an Uber ride here in Wuhan, compared with Didi Kuaidi, its Chinese rival,î said journalist Chen Jun in the capital of Hubei Province.

Uber also needs to improve its car assignment system and route navigation in cities like Shanghai, which has many one-way streets.

Users often wait more than 20 minutes on a street in Shanghai after calling on Uber services, even they are shown to be "close' to cars on Uberís map.


"I have to pick them up even it wastes time for both of us,î said a former Uber driver surnamed Xi, who now offers his services only through Didi Kuaidi. "It's ridiculous."

Uber, which has attracted investment from Baidu, will enter 100 more Chinese cities in the next year, Chief Executive Travis Kalanick said recently. The ride-hailing company now covers only 20 cities. Regulations, often murky, remain a sensitive issue for sharing economy online firms. Most Airbnb hosts willing to talk with Shanghai Daily declined to give their full names because hosting tourists without a business license, leasing contract or tax obligation is still a gray area in China.


"I have never been informed about tax and licensing issues,"Hugo said. "Isn't Airbnb responsible for that?"