The Dividend Era Is Coming To An End. Where Is The Moat Of The Property Enterprise?

The data released by the National Bureau of Statistics at the beginning of the year showed that China’s real estate industry still maintained a 6.5% growth in 2019, and the transaction volume reached a new level of 15.9 trillion compared to the sales of 14.9 trillion in 2018.

This number did not bring solace to the real estate industry with anxiety. Generally speaking, this is probably the last peak. It is no doubt that the large probability of 2020 will be negative growth. The latest data also confirms that the total transaction area of residential & commercial housing nationwide fell by 26.3% year-on-year from January to March, and the sales fell by 24.7%.

The transformation of market supply and demand, the maturity of economic development, and the national policy of “house – just for living”, all of which have brought the dividend era of the real estate industry to an end. It means that competition among property companies has intensified and the market elimination function has accelerated.

As of April 30th, 2020, according to the announcement website of the People’s Court, 150 property companies and related firms have gone bankrupt and liquidated, most of which are small and medium-sized housing companies. Suddenly, the developers found that the benefit castle is hard to hold without a moat. Under the situation, how the developers build their own moat?

Many property companies have launched online sales galleries during the COVID-19 outbreak, and have some initial experience of digital marketing to help the industry out of difficulties. After lockdown, the state invested more than 50 trillion yuan to build 5G, big data, artificial intelligence, cloud computing and other digital “new infrastructure”, which has reaffirmed the dominant position of digitalization in the future. The real estate industry will be rebuilt under the sweep of the digital wave from development & construction, marketing transactions, property services, and other businesses. Among them, digital marketing tools will help property companies tap their own economic moat at the fastest speed.

Moat 1:Intangible assets-brand

Vanke implements a regional management system, and regional companies are responsible for the performance of the entire region. High performance and low cost make Dongguan-Vanke stand out among many branches. As early as 2017, Dongguan-Vanke realized the value of marketing digitalization and began to extent marketing online, successfully creating the brand of “Wan Xiaoer(mini-program for project display and marketing activities)”.

Dongguan-Vanke continues to focus on all aspects of real estate online marketing and outputs a large amount of lively and valuable content to let customers understand the brand (“Wan Xiaoer) in an all-round way. The team, creating the mini-program, researched all the concerns of homebuyers, restore the real scene of finding a house and viewing a house online, and let customers trust the brand, then matching with the offline Vanke real estate supermarket and excellent property services, keep customers loyal to this brand.

Digital marketing is of great significance for property companies to build a brand’s image and dig deep into the moat of intangible assets. Real estate brands have been eroded by distribution channels in the past few years. On the other hand, it takes a lot of investment and a long time to build a brand. So the direct effect is small in a short time. Second, in the case of a lack of reliable traffic collection, the effect of the investment cannot be evaluated. However, the online selection cycle of customers became longer after the end of the real estate bonus period, and the proportion of online decision-making increased. So the brand will become the core basis for retaining customers.

Moat 2Cost advantage

Some people say that management is a permanent moat for enterprises. The improvement of management efficiency will help enterprises reduce costs and increase efficiency, and bring competitive advantages to enterprises.

Indeed, the digitalization of real estate combined with the VR house viewing and live stream can help property companies to improve marketing efficiency and greatly save costs such as site, logistics, and material costs, but which are just the angle of the iceberg of digital marketing power.

Every link, role, activity in the real estate marketing chain is producing data. In the past, these data were difficult to connect and share, forming a data island. Marketing digitalization can connect these data silos, through big data and cloud computing capabilities, precipitation, and analysis of data, so that the entire management is transparent and automatic.

We can calculate the input-output ratio of each channel and the ROI of each marketing activity to guide our marketing strategies by property digitalization. What’s more, it can also target high-traffic intent clients and gain insight into their interests and preferences, so that property companies can achieve more accurate advertising and reduce the cost-effectiveness ratio.

Moat 3Network effect

The network effect means that the more users, the greater the value; the greater the value, the more users. When data reaches a critical point, it can self-fission and self-growth, which is what makes digital marketing superior.

For example, Universal marketing was popular in the real estate marketing circle a few years ago to represent an “Internet thinking”. When it cooperated with the digital platform, it produced a nuclear fission effect. Take Phoenix Cloud mini-program from Country Garden as an example, it has accumulated 14 million users so far (launched June 2019). The mini-program combines universal marketing making a beautiful performance, and the full-caliber sales brought by the mini-program in March are more than 600 million per day!

This digital marketing comes with the network effect, which can make the economic moat of property enterprises have the vitality of self-growth.

The era of real estate dividends is over, and the future of digital transformation is coming. In this transformation, SaaS software company serving the digital marketing of real estate, IDEAMAKE, is relying on internet thinking and big data innovation capabilities to empower property companies to dig deeper into the economic moat of intangible assets, cost advantages, network effects. What’s your opinions about the topic, If you have any questions about the article or want to discuss with us, please leave us a comment below or email us:

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