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E-commerce: a new trend in real estate market?

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Advisory firms maintain that the online real estate segment has witnessed a two-fold increase in the number of deals in 2014, as compared to 2013. The value of the deals has also increased from $19 million in 2013 to $232 million in 2014

Experts say its more about the consumer sentiment, belief and greater transparency which is culminating into the radical growth in the segment. Users are no longer merely interested in searching for houses, they are also buying houses online now.

Published in: Real Estate
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E-commerce: a new trend in real estate market?

  1. 1. E-commerce: a new trend in real estate market?
  2. 2. Rise of a New Sales Channel Advisory firms maintain that the online real estate segment has witnessed a two-fold increase in the number of deals in 2014, as compared to 2013. The value of the deals has also increased from $19 million in 2013 to $232 million in 2014 Experts say its more about the consumer sentiment, belief and greater transparency which is culminating into the radical growth in the segment. Users are no longer merely interested in searching for houses, they are also buying houses online now.
  3. 3. Birth of The Concept Online search and compare for real estate is not new in India. Portals like 99acres.com and MagicBricks.com is there in the market for more than a decade now, but all these portals managed to be an information provider for dealers, brokers, inverses, and buyers When the chairman of SoftBank, Masayoshi Son, invested ($100 Million) in a two year old portal- Housing.com, it gave an alarming signal that India is eying for something big in online space and moving for a change in the entire realty market diaspora. The second in the league were, Rupert Murdoch’s NewsCorp, picking up a 25 per cent stake in another portal- PropTiger.com, also underscored the appeal Tata Housing tied-up with e-com giants like Flipcart.com to sell its property online and received moderate response. This gave an insight that this channel has a huge potential to grow in coming years and many players following this route Players like Signature Global took one step further and created their own payment gateway system for customers’ ease to avail online application form. This experiment worked well for them and they received more than 1,000 applications in less than 90 days
  4. 4. Compelling Potential > Two-fold increase in the number of deals in 2014, as compared to 2013 > The value of the deals has also increased from $19 million in 2013 to $232 million in 2014 > More than 10 million current online shoppers are slated to grow double in 2 to 2.5 years time
  5. 5. Know The Buzz World Many players have already shown their interest to tie-up with one or more e-com giants. The players are also looking out to set-up their own payment gateway systems to tackle the online sales “The real challenge lies in understanding the consumer and the way they respond to various mediums”, says Mr. Pradeep Aggarwal, MD Signature Global Group. He emphasised on the fact that listing your property on e-com portals are not enough, how you market your offers makes a huge difference. It requires working with your offline channel where you train you sales force to divert the customers to avail quality benefits of saving time and energy, creating greater transparency in the market place. He also emphasised that the effective use of online media is very important - Catch people where they are!
  6. 6. Know The Challenges Inputs from random real estate sources: Volume of Transaction: Most of the real estate players said that they can become partially available on E-com sites but full transaction availability is yet a far sighted dream Transparency: Online sales normally works on greater transparency. Real estate market has always played on thin line where the complete transparency is always a matter of concern Old Channel: Partners, dealers and other associates look online marketing as threat to their traditional business
  7. 7. Recent Buzz Around On March 15, 2015, The Times of India reported: E-commerce companies fuel growth in brick-and-mortar real estate: For companies that do their business online, e-commerce giants are spending a lot on brick and mortar. Just 12 hours before the country rang in the New Year, cab service provider-Ola signed on 20,000 sq ft of prime office space at Embassy Golf Links (EGL), a premium Grade A business park located just 20 minutes away from Bengaluru's city center of MG Road. On Jan 26, 2015, The Hindu: E-commerce expansion benefits real estate and logistics sectors: India’s warehousing and logistics real estate segment has benefited immensely from the expansion in e-commerce over the last two years. On Jan 27, 2015, JLL: Is E-commerce Replacing Physical Retail In India?: India’s retail market value was estimated at $520 billion in 2013, and is expected to grow to $950 billion by 2018. With a CAGR currently pegged at 13%, the Indian e-commerce market is expected to grow the fastest within the Asia-Pacific Region – with its market size doubling every 2-2.5 years. This certainly gives us reason for deep introspection. While the global growth rate of online shoppers is estimated at 8-10%, India currently has more than 10 million online shoppers.
  8. 8. Recent Buzz Around On Dec 1, 2014: Real Estate + E-commerce = Winning formula: Sumit Jain, founder of Commonfloor.com said, “The growth in the internet base and positive economic sentiment in the country, as well as the bullish sentiment of investors across the globe has helped us. Since it is technology that finds the right property, the traction in this segment is high.” On Oct 21, 2014, VCCircle reported: E-commerce is set to drive a commercial real estate boom: The e-commerce industry may not need retail space, but it may drive the commercial real estate industry by picking up giant warehouses or super-sized corporate offices which can house their large teams comprising customer support, tech, analytics and marketing.
  9. 9. E-commerce in real estate market looks very promising but there is a lot of ground work needs to be done to provide real value of the online market. We will come up with more update for you as this segment dwells in times to come. Warning: this document is presented by RealtyMyths on the basis of the overview of the information available in the public domain and is meant for information only. This document should not be referred to as a source of reference to any professional advice or business decision. RealtyMyths shall not be liable for any direct or indirect damages that may arise due to any act or omission.

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