Even as COVID-19 rages across the globe and weighs on global tourism and road travel, Zuzuche continues to grow its business and even manages to secure funding for further expansion when many rivals have been squeezed out of the market.
Zuzuche (Chinese: 租租车), one of China’s largest car rental platforms targeting both domestic and international markets, recently raised tens of millions of dollars in a funding round of Series D from undisclosed investors.
The company, founded in Guangzhou, capital of southern China’s Guangdong Province, in 2011, provides services including international and domestic car rental, car insurance, driver’s license translation, and more. international driving, global attraction tickets and tourist sim cards.
According to a company statement, the funds raised in this round will be used to develop products and services, apply digital technology on a larger scale, reach deeper into the domestic market and hire more talent for global operations. .
Li Bin, the co-founder of Zuzuche, told EqualOcean in an exclusive interview that investors have chosen to pump money into this platform even as COVID-19 is still raging across the world, causing shutdowns. and hitting international tourism. Victims include road trips, a new favorite among emerging Chinese middle-class consumers.
Against this backdrop, short-distance trips have become the norm, with road trips becoming increasingly popular among safety-conscious travellers, Li said.
“The outbreak has dramatically accelerated the market education process, leading to higher levels of acceptance and recognition of car travel among broader populations,” Li told EqualOcean. “The most noticeable manifestation is that users have a shorter movement radius.”
The entrepreneur also explained that since car rental duration is getting longer amid the pandemic, the company has reported a higher redemption rate and higher units per transaction (UPT).
To date, Zuzuche has built a supply chain network covering more than 200 countries and regions, with millions of cars in stock.
Meanwhile, Zuzuche operates in 31 provinces and 600 cities across China. It hosts nearly 3,000 car rental companies and premium service providers on its platform and has more than 20,000 partner stores.
Zuzuche’s national compound growth rate soared to 470% from the fourth quarter of 2019 to the first quarter of 2022. Li attributed the company’s “unique” business model for the surge in consumer demand for its services.
Li said the company’s proprietary SaaS system has made it easier to integrate vendor, user and partner resources. This also enables it to provide tailored customer services and handle user requests on a case-by-case basis, thereby increasing user retention rates.
Even though China’s outbound tourism curbs are still in place, reducing the company’s revenue from international car rentals, Li remains optimistic about the global market outlook.
Describing global car rental as a market worth “hundreds of billions of dollars” and “with immeasurable potential”, Li said that contrary to popular expectations, Zuzuche’s overseas business has gained greater traction. growth space.
“Competition among peers is gradually decreasing,” Li said, referring to the reduction in the number of competitors who have retreated due to economic difficulties caused by the pandemic.
Li’s company is one of the first domestic players to operate car rental globally. Less than a year after launching its international business in 2017, Zuzuche had 5 million users. Using a data-driven operating model, he said business volume remained stable even at the height of the pandemic in 2020, and still grew by 60% to 100% each year over the two last years.
As many countries reopen and ease travel restrictions, the startup’s international revenue has rebounded at a faster rate, and in the first quarter of 2022, its overall revenue from this sector tripled from US levels. before the pandemic in 2019.
Nowadays, the market is still relatively competitive, but as a newcomer, Zuzuche believes that there is still plenty of room to explore the market, especially in the post-epidemic era when the market is changing and the demand of consumers is released. He remains convinced that Zuzuche can win a better market share thanks to the world-class operational efficiency of Chinese Internet companies.