Developers are increasingly adopting the online route to entice prospective buyers, with discounts and value-adds to sweeten the pot. It may take some time, though, for the trend to really take root.
Ah, the joys of the Internet - first you could shop ´at´ home; now, you can actually shop ´for´ a home! With the real-estate industry trying to fight back on the heels of a slowdown and immobile inventory, developers are turning to the Web to draw in prospective customers - with some degree of success.
Consider the following: Tata Value Homes sold 200 units worth Rs 130 crore at the 2014 edition of the Google Online Shopping Festival (GOSF). Kolte-Patil Developers sold 250 units online, worth Rs 150 crore each at its online shopping festival Nest Fest. And SBI has tied up with website Magicbricks.com to auction 300 properties online.
In fact, it was Tata Housing Development Corporation that first ventured into uncharted territory by tying up with Google for GOSF, which included the real-estate vertical for the first time in 2013 - the company sold over 50 units online. Encouraged by the response, in December 2014 Tata Housing and Tata Value Homes partnered again with GOSF to exclusively launch properties in Bengaluru (The Cascades) and Mumbai (New Boisar Project) at exciting prices. The result? ´The company received booking orders worth Rs 130 crore against 200 units in the three-day festival,´ says Brotin Banerjee, Managing Director & CEO, Tata Housing Development Company. ´To date, Tata Housing has sold over 1,500 apartments online translating into over 1 million sq ft. Seventy per cent of our customers come from the online medium and the company now plans to sell homes on its own portal as well as tie up with other e-commerce companies to increase its reach.´
Other developers are following suit. ´The ease of completing transactions online´ is one of the decisive reasons for customers to choose one brand from the other, believes Ashish Puravankara, Joint Managing Director, Puravankara Projects Ltd. The company received over 5,000 enquiries and online bookings for 507 homes during GOSF. And, it booked over 125 homes in less than 12 hours. Currently, around 75 per cent of inquiries for Puravankara are generated online. ´Acquiring customers through e-commerce channels reduces the cost of acquisition,´ he points out. ´This helps developers pass on the savings as significant benefits to customers, thereby making it a very attractive proposition. Real-estate companies are investing in digital marketing to enhance market outreach and effectiveness and reduce overall cost of customer acquisition.´
Widespread access to the Internet has also given consumers the power of information, bringing in more transparency, strengthening the builder-buyer relationship, and expanding a company´s reach - now, a buyer sitting in Chennai can buy property online in Delhi or even Mumbai. ´With the Internet as a key facilitator, we were able to reach out to prospects across geographies,´ affirms Omar Gull, Head-Marketing-Luxury & Digital, Kolte-Patil Developers. ´Our customers were from 80 cities in 25 countries. We got a brilliant response from Tier-II and Tier-III cities all over India and the response from small cities in Maharashtra was phenomenal.´ Kolte-Patil, which recently concluded its festival Nest Fest in Pune, sold close to 250 units online, worth Rs 150 crore in 10 days. The units on offer also included luxury villas worth Rs 10 crore.
The right platform
In addition to their own websites, an increasing number of developers are tying up with online realty and e-commerce portals to enhance their reach.
For instance, Tata Value Homes has formed alliances with Snapdeal.com and Housing.com. ´When the company tied up with Snapdeal, the focus was on reach,´ explains Banerjee. ´With Housing.com, the focus was on leveraging the portal´s 3D-rendering technology to create a better customer experience. These various innovative partnerships have resulted in the sale of over 1,500 apartments online. Tata Value Homes has also launched its own e-commerce platform, Tatavaluehomes.com.´
Taking a cue, Godrej Properties Ltd (GPL) has also tied up with Snapdeal, enabling users to select the relevant cities for which GPL offers are available and avail incentives like monthly rental benefits up to Rs 3.26 lakh for two years from the date of booking; special discount of Rs 50 per sq ft on Snapdeal; and winning Snapdeal shopping vouchers worth Rs 1.5 lakh. ´The Internet is a primary and seamless source of information for home buyers and we are focusing on creating the right format beneficial for us and our customers,´ says Girish Shah, Executive Vice President-Marketing & Sales, Godrej Properties Ltd. ´The number of online enquiries for our projects has more than doubled over the past few months and 20 per cent of our leads in the past year have come through online sales. Also, currently 14 per cent of our booking is through the online medium.´
For e-commerce portals, this new extension of their business is more than welcome. ´The real-estate category on Snapdeal has seen tremendous response from customers since its launch in August last year,´ says Amit Maheshwari, Vice President-Fashion, Snapdeal.com. ´The category has grown significantly in the past six months and has exceeded all our expectations. Our aim is to become the most trusted channel for customers to buy apartments online. In order to do so, we have tied up with renowned developers like Tata Value Homes, Godrej Properties and Kolte Patil among others. We work alongside our partners to design great value offerings for our customers. We believe that with time, we will be able to significantly change how people buy their homes by bringing the best of offerings on Snapdeal´s marketplace platform.´
Meanwhile, IndiaProperty.com recently tied up with The Confederation of Real Estate Developers Association (CREDAI) for CREDAI FairPro 2015. The three-day mega online property fair saw 85 developers showcase 300 projects live on the online platform. ´The response at CREDAI FairPro was tremendous,´ says Ganesh Vasudevan, CEO, Indiaproperty.com. ´We got 21 bookings in one day and 40 per cent of those came through the mobile app. That´s when we realised that we should take it a notch further and that´s how we conceptualized the #GetHomeNow online property sale.´ A week-long sale held in the month of March, #GetHomeNow, dubbed the largest e-commerce platform for online property buying, provided consumers across the globe access to over 125 developers and more than 200 projects with an array of exciting deals and discounts on offer.
An immersive experience
Helping customers take the plunge are virtual reality tours, mobile applications, market research studies and expert analysis that ensure any decision taken is a truly informed one.
Take, for instance, CommonFloor Retina, a recently launched app by premier realty portal CommonFloor.com. The app, which can be downloaded from Google Play, gives prospective home buyers a virtual tour of the property by attaching their phones to a box of lenses, which, in turn, can be bought from Flipkart.com for a mere Rs 999. The app enables buyers to view the complete property, right from the exterior to the living rooms, bathrooms and bedrooms. And as Vasudevan tells us, ´With features like TruView by IndiaProperty.com, a buyer can have an aerial view of the project and explore it to the fullest via 3D floor plan and a virtual tour.´
´CommonFloor Retina gives you an armchair view on the property; it´s like taking a guided site tour from the comfort of your home that you can also show to your decision-makers,´ says Vikas Malpani, Co-Founder & Vice President-Communities, CommonFloor.com. Launched in March, Commonfloor already has six leading developers, including Sobha, Mantri and Divyasree, who have come on board to share the technology with their customers. ´What happened to Nokia after the smartphone revolution?´ he asks. ´Today, every consumer has a smartphone and with it, the power of the Internet. The question today in front of developers is not about adopting technology but what they want to be in the next five years. If they have that clear vision, they can utilise the technology revolution really well. And if they want to be the pioneer, the leader, the brand, then technology and the Internet lie at the core.´ In addition, many realty portals are investing much time and energy in creating market reports, research reports and indexes to provide a prospective buyer all the required information to carry out an in-depth comparison on the options before zeroing in on one flat. ´At RealtyCompass, we have numerous research reports, expert reviews, builder history and numerous other indexes that put the power in the hand of the consumer to make a wise choice,´ says Nimesh Bhandari, Co-Founder, Director, Chief Executive Officer, RealtyCompass.com. ´Although 50 per cent of the online bookings are cancelled currently, developers and realty portals are building a way to win the trust of home buyers.´
Booked; not quite hooked
Bhandari´s last comment brings us to the downside of the online property market as it stands today. It is a fact that one of the star attractions at online real-estate sales is the low booking amount. However, it is equally true that many such bookings are never converted to actual buying. And even when properties are sold online, they are mainly small ticket properties.
´Around 95 per cent of online sales are for small ticket properties,´ agrees Vikram Goel, CEO, HDFC Realty. ´Buyers ask for very low booking amounts and people don´t hesitate to swipe a credit card. However, many a time, these people retract and ask for a refund.´ That said, Goel is quick to add, ´If you are using a genuine and credible platform like HDFC Realty, these bookings might get translated to sales. As of now, the Internet is a fantastic tool for marketing and getting the consumer hooked, but sales-wise it will take another couple of years for the buyer to reach that comfort level.´
For his part, Gull avers that online transactions show a high intent to purchase. ´Online transactions have a daily limit that mostly isn´t very high,´ he says. ´That´s one of the primary reasons to keep the booking amount low. Other than that, we offer 100 per cent refund on cancellations, which ensures that if the customers have any shortfall in home loan, down payment or capital investment, there will be no cancellation fees.´
All considered, there is considerable optimism about the online option in a maturing market. ´Although there is 30 per cent cancellation on average, many of these online sales are full of discounts and other value-adds that make them an exciting proposition for home buyers,´ says Pankaj Kapoor, Managing Director, Liases and Foras, a leading real-estate research firm. ´However, most of these projects are sold to the global audience and NRIs for whom property buying is not a luxury but an investment. An NRI in Dubai who wants to buy property in Chennai would prefer doing it online rather than travelling all the way. The Tier-II and Tier-III markets are too thin and consumers from here still prefer the traditional route of buying property.´ Time will tell how deeply the online route takes root.
Social media performance
- AVANTIKA KUKRETI
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