China’s O2O giant Meituan announced yesterday the launch of its homestay business – Zhenguo Homestay (榛果民宿 in Chinese), taking another step to branch out into more O2O verticals, local media is reporting (in Chinese).

The homestay service has listed some properties in tier-one cities as well as some popular travel destinations on its app and plans to increase its housing supply to 150,000 properties by the end of this year.

Zhenguo Homestay is attracting individual landlords to share their vacant apartments on its platform, noted Feng Weihe, head of the home-rental service. Most of these will be whole-apartment rentals rather than renting out individual rooms in order to better address possible trust issues, Feng added.

The introduction of the homestay service is the latest expansion effort by Meituan after the O2O giant added a car-hailing feature into its app in February, going head-to-head with car-hailing giant Didi.

As a late entrant to the short-term home rental market, where early birds AirbnbXiaozhu (小猪in Chinese) and Tujia (途家in Chinese) have been pitting against each other, Meituan is facing more intensive competition in terms of operation and housing resources.

On the flip side, there remain abundant opportunities for Meituan to tap the budding market as its foray is coinciding with a good timing when the homestay culture is just gradually taking root among Chinese users.

And the addition of the new vertical is bound to attract more traffic to the Chinese O2O titan’s platform which boasts troves of new features from food delivery and ticket-booking to hotel reservation and thus helps enhance its engagement with more users.

Currently, PE and VC firms have begun to give Chinese O2O firms cold shoulders, as these firms have not yet to come up with a viable profitable business model.  Meituan is not immune either.

The firm has been thwarted in its repeated efforts to turn its core businesses around, namely group buying, food delivery and hotel reservation. Dogged by skepticism about its profitability, the firm saw its valuation fall one-third to US$ 12.5 billion this year. The company seems to be hoping that the homestay service could breathe life back into its ailing business.

Sheila Yu is a Shanghai-based technology writer. She brings readers the biggest news from Chinese language tech media. Reach her at

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