Innovation and Consolidation - the Way Ahead in India's Online Real Estate Space
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
For major institutional investors, India is on top of the list for preferred real-estate investment destination. There is a sense of excitement in the air as the latest FDI figures reveal that there has been a significant jump in foreign investments flowing into India. FDI inflow has jumped to $60.08 billion from $36.05 billion in 2013-14.
Spotlight Again on Online Real Estate Players
Thanks to the timely intervention by the government, through tax sops for the great Indian middle class, there is a sudden renewed interest in India's real estate sector -- primarily driven by affordable housing. This, in turn, brings back the spotlight on India's online real estate players as more and more consumers are searching property online more than ever before.
Today around 65 per cent of those buying a home come online at some stage of the process. We expect this figure to grow as three-fourth of the users will be using online as a more efficient medium for searching property. Increasing mobile internet penetration and awareness about real estate portals have also driven the number of users.
With increasing business, the Indian online real estate space has become a crowded space. But frankly I don't see a place for too many players in the online real estate space. And there are only two ways this space can grow -through consolidation and innovation.
New Kids on the Block Should Merge with Big Brothers
Consolidation is happening in the middle and bottom. The new players raised a lot of funds but underestimated the incumbents. New players haven't managed their funding well and it remains a challenge for them. So it will be wise for them to get merged with other big players and come up with better offerings. Only players will deep pockets will survive and flourish. There is space for either one dominant player, or at best two.
Portals should Innovate Their Services
Innovation is the order of the day for all real estate portals. With time, the online Indian real estate space has matured a lot and so has the consumers.
And as the home buying process increasingly moves to online from offline, the onus is now on the real estate portals to innovate with their services and offerings. Infact a study by Google suggests that the ecosystem is perfect for all real estate players to innovate. More than half the real estate buys in 2014 were influenced by the Internet research, revealed Google.
What was more interesting about the survey was that this phenomenon was not only limited to Metros but has been extended to tier-2 cities as well.
In fact this is the best opportunity for real estate portals to innovate and offer an immersive property search solution to the consumer. One must keep mind that innovation is not a luxury, it is the need of the hour. It is the natural way to grow business.
Attention to Customer Experience
Today, buying a house is not just an investment, it is all about investing in an experience. Consumers want to live this experience. And I am willing to bet on players, who would offer the best experience to consumers. With technological advancements, online portals have become smart and the home buyer smarter.
Right from the discovery phase, real estate portals assist buyers with a whole range of services like understanding property worth, research, for services during buying and/or post-purchase phase, chat forums and simply taking advice expert advice.
Additionally the real estate industry has embraced digital like never before as a means to solicit the home buyer and build the brand thus significantly making the role of online real estate portals significant than ever before.
Portals Perfect Platform for Developers
Realizing that going digital is the way ahead for the real estate sector, developers are going all out to leverage the rich media experience in terms of 3D floor plans; 360 degree, immersive walkthroughs; HD videos and so on, which help their brand marketing efforts. Online portals give developers the perfect platform to showcase their products and we expect digital to capture more than 25 per cent of their purse. And property portals will get a larger share of the pie.
Data Science Unit
Real estate websites have leveraged technology in the most meaningful way to give the home buyer a delightful experience. The portals are also providing data sciences units. In an industry that has always been plagued with limited availability of information, which is the prime pain area for consumers, data-based insights not only democratize the system but also become a potent weapon in the hands of buyers who always want to be well informed before taking any decision. These units generate algorithms and analytics that improve search, provider information that otherwise are difficult to fetch and help curate sellers and generate prices/demand data that can be used as a decision-support system.
Virtual Reality is The Game Changer
The consumer is opting for the immersive solutions that make the entire property discovery experience delightful thus reducing time and efforts required to make actual site visits. But what would certainly be the game changer is virtual reality, which is becoming far more immersive. It will revolutionize the home buying experience and transform the complex and tedious house buying affair into a simplified procedure for the end user.
Over the last few years, the industry has witnessed a 62 per cent growth (doesn't include Proptiger and Commonfloor) while traffic has also grown proportionately. It is a testament to the fact that more and more consumers are coming online during the home buying process.