LGBT tourism services eyed for growth prospects

The gap in the market provides opportunities for startups like GLOW, and also for overseas travel service providers who want to serve China's LGBT market but have little experience identifying clients and business partners in China.

"I thought it would be difficult for startups like us to explore overseas LGBT travel sources," Wang said. "But when I started doing this, many of the mature LGBT travel service providers overseas came to us."

Business growth may come from providing services instead of resources as the understanding of the consumption and traveling habits of the LGBT population deepens, said Xiao of CandyCANer.

In China, service providers expect the industry to develop as more people feel comfortable being open about their sexual and gender orientations. WorkForLGBT's report found only 3 percent of surveyed men and 6 percent of surveyed women are completely open about their orientation.

Xiao said this is true especially for those who work for the government or State-owned enterprises.

"For us, we are trying to get to know our target customers from social media and places LGBT people like to visit. We also have close cooperation with nonprofit organizations that focus on researching the LGBT group," Xiao said.

"We have to do business like traditional businessmen: getting to know your customers and creating products based on their wants and needs."