BEIJING: China’s biggest home-sharing startup Xiaozhu, known as China’s Airbnb, is looking to overcome the persistent issue of identity verification and believes facial recognition technology will be key.

Though China’s government has given a green light to the development of a sharing economy, businesses such as Xiaozhu have faced regulatory uncertainty that has stymied the full development of an Airbnb-style ecosystem.

Currently, the company has over 200,000 listings in China, and a presence in 80 cities around the world. Though Airbnb is catching up in China with 120,000 listings, Xiaozhu will look to its youthful agility to gain competitive advantage on home turf.

Beginning in the peak season of Chinese New Year, the company’s CEO told the South China Morning Post that it plans to test smart locks that will open by scanning tenants’ faces, complying fully with the laws that demand identity verification.

“Xiaozhu hopes to use the power of technology to find common ground with authorities. Regulators can wait, but with the pace of technology we can’t,” CEO Kelvin Chen explained.

By law, hotels in China are required to register a guest’s identity. Though a provider such as Xiaozhu uses password verification when booking, this measure does not register who actually stays in the room.

Following initial tests, the company plans to start installing the smart lock system in March or April. Just a month ago, Xiaozhu announced its latest funding round, led currently by Jack Ma’s Yunfeng Capital, which pushed the home-sharing startup into unicorn territory: that of a startup valued at US$1 billion or more.

“China has less cultural, customs or legal barriers when it comes to a sharing economy. Although the market may start off slow, Chinese companies move quickly when it comes to upgrading [travel] infrastructure and combining online technology with the offline environment,” Chen said.

Though he expects growth in future, and told the Post that his company is profitable, he added that there was no rush toward an IPO. “As regulation globally is still unclear, we might as well let sharing companies like Uber or Airbnb get listed first and see how it works for them,” he said.

Since the iPhone X, facial recognition has been thrust into the public’s collective imagination. But a handful of brands have been pioneering its use, not least KFC in China, which introduced Alipay’s ‘Smile to Pay’ technology into its stores.

Sourced from South China Morning Post, WARC; additional content by WARC staff