Trust Is the Product: Inside China's 1.2-Trillion-Yuan Home Services Market
By Erick Watson (吴子文), SproutVest Advisers
China’s home services market crossed 1.23 trillion yuan in 2024, with more than 30 million people working in the trade. Demand keeps climbing as the “one old, one young” care burden — aging parents and young children at the same time — lands on dual-income urban families who simply do not have the hours. By most measures this looks like one of the great consumer growth stories of the decade.
And yet the most telling number from the same period is not about growth. In 2023, consumer complaints about home services rose 34 percent year over year. The grievances cluster around the same few themes: service that shrinks once the contract is signed, workers who go silent, prices that are never quite what was quoted. A market this large, growing this fast, is still defined by a single question every customer asks before they let a stranger into their home — and, more pointedly, before they let that stranger care for their newborn or their aging mother: can I trust this?
That question is the business. Not supply, not demand, not marketing. Trust is the binding constraint, and the firms that are pulling away from the pack have understood that trust is not a feeling you earn with friendly service. It is a product you build.
Aggregating aunties was never the hard part
For most of its history, the home services industry in China ran on relationships and word of mouth. An agency knew some workers, a family needed help, and the agency made the introduction. The model scaled badly because every match was a fresh act of faith, and when something went wrong there was no record, no recourse, and often no one to call.
The platforms now taking share did not win by collecting more workers. They won by making trust verifiable. The leading player built a tiered certification system covering health screening, skills testing, and background checks, and put every worker through it. Service became a digital object: orders you can trace, hours you can verify, quality ratings that accumulate over time instead of evaporating after each job. When a customer is unhappy, the worker can be replaced quickly, and the replacement is logged. None of this is glamorous. All of it is product work.
The result is a different kind of company. The old agency sold access to labor. The new platform sells a guarantee, and the guarantee is backed by data the customer can see. That shift, from selling hours to selling certainty, is the most important thing happening in this market, and it is far from finished.
Why this is a product problem, not an operations problem
It is tempting to file all of this under “better operations.” Train the workers, screen them properly, answer the phone faster. Those things matter, but they are not what creates a defensible business. Any competitor can train workers. What a competitor cannot easily copy is an accumulated record of verified service, a credentialing system that customers have learned to rely on, and a matching engine that gets smarter every time it places a worker in a home.
Those are product and data assets, and they compound. A firm that captures structured information from every job (who was placed, what was done, how it went, what the customer valued) ends up knowing things about its own market that no spreadsheet of phone numbers can tell you. Over enough jobs, that knowledge becomes the moat. It lets you match better, price better, and spot the difference between a one-time cleaning and the start of a long relationship.
I spent years at Quantarium building exactly this kind of asset in a different industry. We turned property data into models that ended up ranked first in the country for accuracy and coverage, used across all 105 million U.S. households. The lesson transferred cleanly: the company that treats its operational exhaust as a product, rather than letting it disappear, builds something competitors cannot reverse-engineer. Home services in China is sitting on exactly that opportunity, and most firms are still throwing the data away.
What comes after trust
Verifiable trust is becoming table stakes. The platforms that built it first earned a head start, but the technique is now well understood and the regulators are pushing the whole industry in that direction with training mandates and certification standards. Within a few years, a credible firm without traceable, rated, credentialed service will simply not be in the conversation.
That is good news for serious operators, because it moves the competition to a more interesting frontier: operational leverage. Once trust is solved, the question becomes how much more a firm can do with the same number of workers, how well it can turn a first booking into a recurring relationship, and how intelligently it can match the right person to the right home. That is where the next decade of margin lives, and it is where technology stops being a checkbox and starts being the difference between a regional agency and a business that can dominate a province.
The closest model for this is not an app at all. It is the way America’s best in-home eldercare brands — the Home Insteads and Comfort Keepers — earn trust one long relationship at a time, and stand behind every caregiver they place. That analogy turns out to matter more than the Angi one everybody reaches for first, and it is the subject of the next piece.
I live in Xi’an, and I watch this market up close. The firms here that will matter in five years are not the ones with the most workers today. They are the ones that decide, now, to become product companies that happen to sell home services, rather than labor brokers that happen to use an app.
In the next piece, I will look at why this market is structurally different from the United States — why it has far more in common with American eldercare than with Angi — and why copying the lead-generation playbook is a trap.
Erick Watson is Managing Director of SproutVest Advisers. He has built and commercialized AI and data products across Google, Microsoft, and two startups acquired by Interos.ai and Mr. Cooper Group. Reach him at erick@sproutvest.com or cal.com/sproutvest.
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