Making waves across Asia last week was news that one of the Lion City’s top property developer’s CDL through a China subsidiary was investing USD15 million into online rental platform mamahome.
The mamahome offering not only provides rentals but add on services including maintenance, housekeeping and a property concierge. Mainland China’s appetite for both business and holiday rentals, serviced apartments and long term letting is growing at breakneck speed.
For CDL the tech focused investment into a rental platform is aligned with the industry but break’s away from a higher development risk profile and looks at value creating by rising cash flows.
Last year another Singapore real estate conglomerate CapitaLand invested heavily into the Airbnb residential sharing platform Tujia in China. The move clearly stirred up broader interest into tapping into the Mainland sharing economy. Both mamahome and Tujia are targeting the same space as the global Airbnb machine and it is only a matter of time until they start looking at opportunities to expand overseas.
One advantage for the China-based systems is the understanding of the unique cultural differences of their customers and are able to tap into the enormous market much like Ctrip has been able to ring-fence Chinese travelers.
For now the East West conundrum that technology platforms face remain staggering, and one has to look no further than the war between ride-sharing giant Uber and Didi Chuxing with the latter emerging as the mid-term winner.
What is clear is that niches remain in the global economy and that disruptors who scale up often end up being blindsided by local competition in key markets. Will Airbnb be able to take over the world, or will the world catch up and consumers start to key into options closer to home? That remains the key challenge going forward.