“The demand for car rentals and road trips in China has really surpassed our expectations,” says Ben Li, founder & CEO of Zuzuche. Established in Guangzhou in 2011, Zuzuche was the first mobile platform for Chinese tourists to rent a car overseas.

As Chinese outbound tourism diversified during the 2010s, so did demand for car rentals. By the end of 2019, Zuzuche counted 30 million cumulative users. The vast majority were Chinese tourists, as well as Chinese living overseas and some international customers.

Shifts in self-drive demand mirrored changes across China’s outbound market. “Up until 2016, our users were Chinese tourists aged 35-40,” Ben Li says. “Between 2016 and 2019, when our business enjoyed rapid development, the average age dropped below 30.”

Bespoke services for Chinese drivers

Before the pandemic, Zuzuche’s three biggest markets were North America, Western Europe, and Australia and New Zealand. “But other markets were developing quite fast, like Thailand, Malaysia, Singapore, the UAE and Saudi Arabia, plus some Eastern Europe and Scandinavian countries.”

Customer profiles varied. “In the newer markets, they were mostly experienced travellers who wanted to explore new destinations by themselves. In Southeast Asia, it was mostly younger travellers,” he says.

As its business grew, Zuzuche enhanced its customer engagement by partnering with leading car rental suppliers worldwide, and by developing tailored add-on services.

“We offered other services to support Chinese drivers overseas, as it can be quite difficult in an unfamiliar country,” says Li. “We launched a Chinese driver license translation tool, as our driving licenses are in Chinese, and Chinese road mapping services, as we can’t use Google maps on our phones.” Zuzuche also introduced customised insurance as “Insurance can really be a headache for Chinese drivers.”

“In the newer markets, they were mostly experienced travellers who wanted to explore new destinations by themselves. In Southeast Asia, it was mostly younger travellers,” says Ben Li, founder & CEO of Zuzuche, on Chinese customer profiles.

A right turn from global to local

When the Covid-19 pandemic came, Li and his team had to put in place a fast turnaround when Zuzuche’s Chinese customer base was stranded at home.

“Before the pandemic, we counted 70% of the outbound Chinese self-drive market, but we didn’t focus at all on the domestic market,” he says. “It became obvious in the first quarter of 2020 that we had to make a big decision as the outbound business stopped.”

Zuzuche redirected its resources into China. It adapted the international mobile platform for Chinese drivers in their own country. The ambitious goal was to offer car rental coverage in 600 cities across China as quickly as possible.

“We were lucky that we had the software developed for our outbound business which enabled Chinese suppliers to easily include their fleets and services onto our system,” he says. “Within four months, we had listed 3,000 Chinese car rental suppliers across China on our new platform.”

Entering China’s domestic market was unplanned, but followed nine years of rapid growth as independent travellers became more adventurous while overseas. A growing desire to take control of their own itineraries was paired with smartphone access to car-hire services matching their needs. “More than 90% of our bookings by Chinese customers are made on mobile devices,” he says.

More tourists hit the road in China

Domestic travel was patchy during China’s Covid-Zero era. A combination of city lockdowns, government travel advisories and fear of catching the virus dampened demand for long periods. Car rental bucked the general trend, however.

“Even though the circumstances were very difficult for three years, the demand for self-drive in China was beyond our imaginations,” says Li. “Renting a car was seen as a safer, more cost-effective way to travel.”

Zuzuche noticed divergences between domestic and outbound usage. “For our overseas business, 80% of rental pick-ups and drop-offs are at airports. In China, customers use a range of airports, rail stations and downtown locations.”

Different vehicle preferences emerged, especially for EVs (electric vehicles) and RVs (recreational vehicles). “EVs were becoming more popular for short-term rental in some European markets. Here and overseas, EVs will be a big growth market in the coming years,” says Li. “RVs are not yet very popular in China, although we have some demand, but they are popular in Australia, New Zealand, the US and Canada.”

Frequency of use also differs. “Our outbound data shows the annual bookings are 2.6 per person. It’s much more frequent in China. We have customers who book a car every week. A lot of young people don’t own a car, so it suits their lifestyles to rent one on the weekend.”

Accelerating into a new era

With China open once again, Zuzuche is positioned to capture self-drive demand at home and abroad. “We now have separate teams managing the domestic and outbound markets,” says Li.

Zuzuche’s mobile distribution is boosted by a partnership with Chinese OTA Fliggy, which broadens its reach among Chinese travellers. “We are working with Fliggy on the domestic and outbound markets. We are the only supplier of their outbound car rental products,” Li adds.

With travel activity growing, Zuzuche is now moving through the gears, as its overseas car rental business has recovered to 56% of the 2019 level by May 2023.

“Overseas car rental is our biggest revenue earner, but it might take two or three years to fully recover to the 2019 level,” he says. “Meanwhile, our domestic business is still young, and there are a lot of things we want to improve.”