This story first appeared in DNA Money edition on Friday March 18, 2011.
The entry of HDFC Ltd has stirred the online property search business segment.The country’s top mortgage lender has launched its own real estate search portal www.hdfcred.com. The venture will be operated under its wholly-owned subsidiary HDFC Developers Ltd.
“Our portal is a logical extension of our real estate business. Some of the grouses we came across during our research is that the typical home buyer was not able to get all the details to facilitate their property search process. While there is a lot of information lying around across various mediums it is largely scattered. What we have attempted to do with our portal is bring all of it under one platform in a detailed structured manner,” Renu Sud Karnad, managing director, HDFC Ltd, said.
India’s online property search market is currently estimated to be around `60 crore. It includes general real estate websites like www.99acres.com, www.magicbricks.com, and classifieds portals like www.sulekha.com. The overall market has been growing at 50%.
Sanjeev Bikhchandani founded and BSE-listed Info Edge (India) Ltd’s online vertical 99acres.com is leading this growth with growth rates pegged at 70-75% year-on-year. Vineet Singh, executive vice-president and business head, 99acres.com and naukrigulf.com, said, “99acres pioneered the property search portal business in India and has been aggressively growing the market ever since its launch in 2006. We have been successfully acquiring market share in this space and by the end of this fiscal we will have close to 60% of the revenue share in the market. In fact, we are also at a stage where we will break even this year.”
When asked how HDFC Developers’ foray into this segment is different from existing market offerings, Karnad said existing players are into pure real estate and do not deal with developers in terms of project financing. “In our case however, we have a long-standing (close to 30 years) relationship with the top 1,000 builders/developers in the country. Besides, we also know the credibility of these developers to a large extent. These are some of the critical factors that differentiate us from the other players in the market.”
Other features offered by the portal include searching for properties in key Indian cities at the click of a button, use of filters to narrow down search, add properties to favourites, compare them, and even find out useful information regarding social infrastructure and facilities available in the neighbourhood.
The revenue model in this space revolves around online advertising revenues. For instance, all of 99acres.com’s revenues are online and largely comprises display advertising fee. “We charge a fee for listing new properties and do online campaigns for builders/developers and brokers. A small and growing percentage is the listing revenue wherein brokers buy listing packs to advertise resale and rental properties. Average entry level advertising rates for a broker could be anywhere in the region of Rs5,000 to Rs10,000 per year while bigger brokers spend between `50 lakh and a crore. The average ticket size for property developers/ builders is around Rs5 lakh for a quarter,” Singh said.
The market has its own challenges. Singh is of the opinion that a critical mass in terms of online traffic pertaining to real estate is a must to boost growth. “Until that happens, the explosion in the volume or value of online business (people transacting online) is not going to increase. There is an increase in the number of people taking the online route for property search so internet platform itself is adding to the growth by 30% odd to this business.”
On competition in the form of HDFCRED, Singh said, “We don’t see them as competitors and the coming few years will tell us how serious a player they are in this space. This is not that simple/easy a business to run and manage. We have domain expertise in the internet classifieds’ model and have managed successful business verticals in this space like naukri.com and jeevansaathi.com. This is an execution business and we have a four-year headstart over anybody who wants to get into this space.”
However, Singh also feels that if HDFCRED comes into the market with a worthwhile proposition, they will actually grow the space as against acquiring market share from existing players. “If they are able to do this successfully, they will also increase the credibility of internet as a media for the builder and broker community,” he said.
As for his company’s consolidation plans, he said, “My personal view is that instead of spending money on acquiring an existing player, we’d rather spend that money in marketing, advertising and building better products. I think that will be money better spent rather than going out and acquiring competition.”
The entry of HDFC Ltd has stirred the online property search business segment.The country’s top mortgage lender has launched its own real estate search portal www.hdfcred.com. The venture will be operated under its wholly-owned subsidiary HDFC Developers Ltd.
“Our portal is a logical extension of our real estate business. Some of the grouses we came across during our research is that the typical home buyer was not able to get all the details to facilitate their property search process. While there is a lot of information lying around across various mediums it is largely scattered. What we have attempted to do with our portal is bring all of it under one platform in a detailed structured manner,” Renu Sud Karnad, managing director, HDFC Ltd, said.
India’s online property search market is currently estimated to be around `60 crore. It includes general real estate websites like www.99acres.com, www.magicbricks.com, and classifieds portals like www.sulekha.com. The overall market has been growing at 50%.
Sanjeev Bikhchandani founded and BSE-listed Info Edge (India) Ltd’s online vertical 99acres.com is leading this growth with growth rates pegged at 70-75% year-on-year. Vineet Singh, executive vice-president and business head, 99acres.com and naukrigulf.com, said, “99acres pioneered the property search portal business in India and has been aggressively growing the market ever since its launch in 2006. We have been successfully acquiring market share in this space and by the end of this fiscal we will have close to 60% of the revenue share in the market. In fact, we are also at a stage where we will break even this year.”
When asked how HDFC Developers’ foray into this segment is different from existing market offerings, Karnad said existing players are into pure real estate and do not deal with developers in terms of project financing. “In our case however, we have a long-standing (close to 30 years) relationship with the top 1,000 builders/developers in the country. Besides, we also know the credibility of these developers to a large extent. These are some of the critical factors that differentiate us from the other players in the market.”
Other features offered by the portal include searching for properties in key Indian cities at the click of a button, use of filters to narrow down search, add properties to favourites, compare them, and even find out useful information regarding social infrastructure and facilities available in the neighbourhood.
The revenue model in this space revolves around online advertising revenues. For instance, all of 99acres.com’s revenues are online and largely comprises display advertising fee. “We charge a fee for listing new properties and do online campaigns for builders/developers and brokers. A small and growing percentage is the listing revenue wherein brokers buy listing packs to advertise resale and rental properties. Average entry level advertising rates for a broker could be anywhere in the region of Rs5,000 to Rs10,000 per year while bigger brokers spend between `50 lakh and a crore. The average ticket size for property developers/ builders is around Rs5 lakh for a quarter,” Singh said.
The market has its own challenges. Singh is of the opinion that a critical mass in terms of online traffic pertaining to real estate is a must to boost growth. “Until that happens, the explosion in the volume or value of online business (people transacting online) is not going to increase. There is an increase in the number of people taking the online route for property search so internet platform itself is adding to the growth by 30% odd to this business.”
On competition in the form of HDFCRED, Singh said, “We don’t see them as competitors and the coming few years will tell us how serious a player they are in this space. This is not that simple/easy a business to run and manage. We have domain expertise in the internet classifieds’ model and have managed successful business verticals in this space like naukri.com and jeevansaathi.com. This is an execution business and we have a four-year headstart over anybody who wants to get into this space.”
However, Singh also feels that if HDFCRED comes into the market with a worthwhile proposition, they will actually grow the space as against acquiring market share from existing players. “If they are able to do this successfully, they will also increase the credibility of internet as a media for the builder and broker community,” he said.
As for his company’s consolidation plans, he said, “My personal view is that instead of spending money on acquiring an existing player, we’d rather spend that money in marketing, advertising and building better products. I think that will be money better spent rather than going out and acquiring competition.”
No comments:
Post a Comment