Mayi's homepage. (Photo courtesy of Mayi.com)
Ever since it went online, the short-term private rental market has been booming in China. Industry operators are optimistic about the industry's future prospects as they consider online short-term rental websites a convenient platform for communication and for conducting transactions between landlords and tenants.
In the latest market development, Chinese lifestyle information website Ganji announced on Jan. 6 that it had received nearly US$10 million in investment for its vacation rental service website Mayi.com.
IT website tech.qq.com reported that merely two hours before Ganji's announcement, another short-term rental service website called Xiaozhu.com had also announced that it had received US$10 million in investment.
This development has brought to light the fierce competition between the two websites.
Amidst the intense competition, news of several rounds of personnel changes at Mayi also surfaced, which had led Ganji separating its short-term rental business, according to a tech.qq.com report.
Ganji CEO Wang Liantao and vice president Chen Chi resigned from the company in June 2012, while nearly 150 of its employees were laid off in March. The jobs of another 40 employees at Mayi were terminated in June last year, a loss rate of 80%, the report said.
Several senior executives had proposed in April 2012 that the website should separate its business segment Mayi, but the proposal was not approved.
The main reason behind the substantial layoffs at Ganji's core short-rental business division in 2012, merely six months after its inception, was the internal differences relating to the development of its strategy, the report noted.
Ganji said it had initially invested US$20 million in its short-term rental business.
The report, however, said that due to the huge investment made in the business sector initially, Mayi was unable to break even.
Wang and Chen launched Xiaozhu in August last year, and adopted a strategy of reliance on third-party payment platforms.
Both Mayi and Xiaozhu were optimistic about the future of the short-term rental business, the report said. Moreover, Airbnb, a pioneer in online short-term rental service websites, had raised US$100 million in capital in September, and its value is now estimated at US$3 billion.