Taiwanese startup AsiaYo believes a "customer service"-centered strategy will allow it to compete with Airbnb. Amidst regional growth, monthly revenue has grown by 15- 20%, allowing the company to obtain NT$100 million in Series A fundraising.
Taiwan’s AsiaYo is hoping to topple Airbnb’s dominance in room bookings and homestays for travelers, providing more Chinese language services and a greater emphasis upon Asian markets.
Established in 2013, AsiaYo has already made substantial inroads in both major cities and the countryside in East Asia, enlisting more than 9,300 properties in Taiwan alone, and more than 1,700 in Japan. Despite the large array of accommodations, however, there are still many challenges for the company to overcome.
Going against the big players in the business is no simple feat. “Simply buying advertising on Google or Facebook won’t allow us to beat our competitors because this is not a type of ordinary competition. We are battling large, well established multinational companies. Frankly speaking, the level of difficulty is really quite high," says AsiaYo Chief Operating Officer Chris Chen.
Currently, AsiaYo's business model is based on assessing a 10-15% flat-rate service charge from the property owner, the cheapest charge in Taiwan.
Although registration as a local company entails higher taxes and others costs compared to rivals such as Airbnb, Agoda and Booking.com, Chen believes AsiaYo’s revenue can grow tenfold in 2017.
Chen admits that AsiaYo and Airbnb’s travel platforms share many similarities, yet is convinced to win market-share by virtue of the company’s in-depth services that emphasize customer needs.
Says Chen: "Airbnb’s platform acts more like a broker, pairing buyers and sellers who then complete an independent transaction. With us, consumers can contact us at all times should they encounter problems.”
In its initial phase, AsiaYo’s plans were focused on the Chinese-language market, where Airbnb already offers a Chinese-language interface. However, Chen believes opportunities continue to abound. For example, communication with local managers remains difficult as limited English abilities persist especially in more rural areas.
Allowing customers to overcome these issues hassle-free is thus an area where Chen believes AsiaYo to excel. As part of this effort, the company operates a service hotline through which customers can obtain immediate assistance via social media platforms like Facebook Messenger, LINE, or WeChat.
AsiaYo’s emphasis on service stems from its experience in Japan. Starting from the third quarter of 2016, some 60% of the company’s revenue came from bookings in Japan, exceeding even domestic transactions. The company attributes this success to staff fluent in Japanese and their ability to provide timely customer service.
According to Chen, customer issues oftentimes involve contacting the property owner. Be it broken sofas, locked doors, or dysfunctional hair dryers, staff will ensure that travelers do not have to compromise.
"For instance, at the beginning of this year, a Taiwanese traveler became lost in Japan as soon as he left the train station. After calling our hotline, service staff immediately assisted him in finding his lodgings, going as far as checking his route with locals and a taxi driver,” recalls AsiaYo Marketing Director Su Yu-chen.
AsiaYo’s current expansion is also aimed at overseas markets. After six months of preparatory work in Japan, it has signed cooperative agreements with over 1,700 accommodations.
The company has also set up a dedicated office in Japan and hired Japanese staff, as well as recruiting accommodations in major and smaller cities to diversify its offerings. To ensure quality, AsiaYo cooperates with local property management companies and collects consumer feedback.
Additionally, to further develop these local markets AsiaYo provides travel itineraries and sponsors content creation through bloggers, who promote tourist attractions and share experiences. Ultimately, AsiaYo hopes to establish itself as a center for all travel-related content.
AsiaYo’s excellent performance in Japan allowed it to raise some NT$100 million in Series A fundraising at the start of 2017. With investments from Taiwan’s Darwin Venture Fund and Japan’s Accord Venture, AsiaYo hopes to expand into the Korean and Thai markets.
"I think venture capital has confidence in AsiaYo because of our business model and our revenue performance," says Chris Chen. Over the past 18 months, the website alone has seen 15-20% revenue growth every month, with 30% of bookings coming from outside Taiwan, manifesting its rising international popularity.
According to Chen, this regional growth and rising revenue were core factors attracting investors: "Hong Kong business especially is growing quickly, with customers using the platform not only for traveling to Taiwan, but also for booking trips to Japan."
To be sure, for now AsiaYo still plays the role of the ambitious upstart, trailing international heavyweights like Airbnb, yet advertisements and promotions are rapidly popularizing the brand beyond Taiwan.
As part of its expansion, the company also pursues vertical integration by cooperating with budget airline Tigerair and tourism itinerary platform Klook. For example, if you want to go to Hokkaido, you can now book a package including a ticket from Tigerair, a Klook Hokkaido ski trip, and AsiaYo accommodation.
Later this year, AsiaYo plans to recruit more software engineers, translators, and others to bolster its roster to 80 people. More so, in order to launch its service in English, Japanese, and Korean, the travel platform is actively working with researchers, translators, and foreign language students at local colleges and universities like National Taiwan University or National Ilan University.
For now, AsiaYo’s strategy to put customers first is paying off nicely. To retain this momentum, COO Chris Chen hints at another fundraising round later this year. As long as the numbers are right, and customers keep flocking to the travel platform, AsiaYo will continue to bring great service to even more locales.