The Truth: Indian Real Estate Startups Are Innovating More Than Global Counterparts

Unprecedented innovation in last 6 months; we are beating the global biggies on innovation!
Indian online real estate space has seen unprecedented innovation in the last 6 months. Its great to see that we are doing stuff which even US or Chinese online real estate players are not doing.
I have listed some of my observations below:
1. The biggest move by Indian players is clearly to enable buyers to book an home online. Its like ‘e-commerce for homes’.
Housing launched Slice View
1
IndiaProperty launched TruView
2
99acres launched iHome
3
The large global players?
Zillow and Trulia in US and Soufun (Fang), E-house and Anjuke in China are not doing any of this yet and all of them have billion dollar market caps!
2. Commonfloor launched world’s first virtual reality product for real estate- Commonfloor Retina.
3. 3D walkthroughs of new projects introduced by Indiaproperty, Commonfloor
4
5
4. Proptiger started selling discount coupons for new projects during Diwali. These discount coupons enable the buyers to get a larger discount on the sale price of the new project (eg- buy a Rs 20,000 discount coupon and get Rs 2 lacs off on a project). However, I do not see any discount coupons live as of now.
This is something that is already happening in China. E-house sold ~100,000 discount coupons in Q4 2014 alone, worth US$120 mn (implying avg discount coupon~US$1,200= INR 72,000/-). This can be a big potential opportunity in India as well.
5. Every player has redesigned their UX in the last 6–12 months.
6. Also, in general lot of startups are doing new things in this space. Some of the examples are
NestAway– online marketplace for shared accommodations
Zenify– Property management for owners
Nobroker & Grabhouse– Find a house/flatmate without a broker

Flatchat– Helps you find accommodation on chat

But challenges still lay ahead…

Unfortunately, the online real estate market size still remains small. Listing fee/advertising model is still a ~300 cr market. If the market does not grow fast, it will be very difficult for all the players to survive.
We are clearly lagging behind on data analytics when compared to the global players. For example- Zillow does a good job with Z-estimates. This is something that I believe will gain more focus over the next 12 months. It will be interesting to see data analytics being leveraged to provide insights/assistance to customers.
[Guest article by Sandeep Reddy. Follow him on twitter @hsrdce.]

4 comments

  • While points 1-5 outlined in the article are good tech innovations but I still don’t get the value proposition that these features provide to the user? Real-Estate is a physical product & just like other high value physical products it seems unlikely that users will make a purchase by simply looking/clicking on an apt on the web. So, I guess, what I am trying to understand here is – where is all this innovation headed & what’s its goal? Perhaps the author has views on this. Thanks.

  • In most developed geographies, the ratio of transactions is tilted towards resale of existing inventory rather than sale of brand new inventory. So the emphasis is on providing data that makes it easy for the buyer to make an informed decision.
    For example, redfin.com provides extremely valuable data on homes such as price of previous purchase/sale transactions, insurance claims, school district, taxes paid, price/timepoint of comparable sales, etc. And this data is available for individual homes, not just averages of multiple transactions that often skews data. The information offered is usually enough to shortlist from available options, visit these filtered options and after you have picked a property, you can actually prepare an offer based on this data.
    In contrast, given that India is still a young country, we have just begun building inventory and most people are first-time home-buyers. While a lot of the virtual-reality stuff is helpful – it is often over-rated and used more as eye-candy by real estate portals to attract users. Given the cheap money available to most players, they are in an arms race to show-off the fanciest eye-candy that money can buy. These moves are in the right direction, but I would have liked to see them done at a lower burn rate – so that these players had the time, attention and money to focus on more utilitarian aspects of easing the entire process of buying/renting a home.
    So I would say that Indian real-estate players have innovated a lot on the marketing aspects of real-estate, but I am waiting to see them innovate on the utilitarian aspects of real-estate transactions.

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