(Yicai Global) Aug. 22 -- Xiaozhu, China's answer to Airbnb, has agreed with Alibaba Group Holdings to list its domestic rentals on the e-commerce giant's used goods website in their second deal of the year so far.

The Beijing-based firm will work with Alibaba's Xianyu platform to create a safer and better quality homestay experience for users, state-backed news outlet The Paper reported, adding that the pair will jointly develop smart systems for the short-term rentals.

Both platforms have gained a firm foothold in China's rapidly expanding shared accommodation sector. Xiaozhu, which is the country's second-biggest player, has more than 35 million active users and global listings exceeding 420,000 units across 400 Chinese cities and some 250 overseas destinations. Last year, 18 million Chinese booked stays using Xianyu.

Xiaozhu also linked up with Alibaba's travel service platform Fliggy in April and with Booking Holding's Agoda on globally shared listings earlier this year.

Total transactions for the sector in China are forecast to hit CNY50 billion (USD7.3 billion) by 2020, according to China's State Information Center, which also predicts the number of shared houses and tenants will exceed 6 million and 100 million respectively.

Xiaozhu and Alibaba have launched a three-week joint marketing campaign to mark their latest tie-up, offering users discounts when booking Xiaozhu stays on Xianyu. The pair plan to form an intelligent rental platform in the next two years to provide users with smart services covering search and payment functions.

Editor: William Clegg