Sandeep Sugla, CEO, Discountedflats
The numbers are incredible - record sales of Rs 120 crore in a month since its launch on October 12, 2011; over 300 flats sold; over 80,000 buyers registered across eight metros; consolidated savings of over Rs 3 crore for home buyers. Incredible, but true. Discountedflats (DF), a pan-India group booking channel, has hit the nail oh-so-firmly on the head. With 7,600 project-specific groups and over 2,000 location-specific groups, this pre-formed group helps the customer save up to Rs 100-300 per sq ft (up to 10 per cent). It has a proposed built-to-suit (BTS) model that will help customers save up to 30 per cent of the cost of a home. Further, it provides a comprehensive comparison of projects with end-to-end personalised service to buyers, including site visits. Sandeep Sugla, CEO, gives Shriyal Sethumadhavan a clearer view of the company, its unique services and future expectations.
Did you expect such a phenomenal response at inception?
We had conducted a survey of 28,000 home buyers. Of this, every single buyer was more than willing to prefer the 'consolidated buying route' or 'group buying route', provided that he would get a good deal at no extra cost and complete on-ground personalised support for site visit and booking.
What is your potential market?
Our main market is residential. Our own market research firm (www.marketsandmarkets.com) works for global tier-I players. We primarily target the mid, mid-upper segment and budget housing.
Elaborate on your project and location-specific groups.
We are spread across Mumbai, Pune, Delhi, Bengaluru, Hyderabad, Chennai, Kolkata and Ahmedabad. A home buyer first decides on a location and budget. For instance, the property rates in Andheri stand at Rs 1.5 crore and in Kharghar at Rs 60 lakh. According to the buyer's budget, if he is placed in the Kharghar group, this is a location-specific group. Further, if he has shortlisted a project within Kharghar, such as Ackruti Meadows, he is added to the Ackruti Meadows group. This is the project-specific group. At present, we have 7,600 projects from pre-launch to ready possession. These include small developers to large tier-I builders.
How are the developers responding?
It's a complete win-win situation for both developers and buyers. The developers get quantum bookings and are ready to pass on certain discounts - from Rs 100 to Rs 300 per sq ft - based on the size of the bookings. Alongside, our brokerage from the builder stands at 1-2 per cent.
What is your business model?
We represent the 'buyers' who do not have any competition. Traditionally, a builder's value chain demands reaching out to a buyer; however, with this massive consolidation with the buyer as the starting point, we have reversed the entire value chain.
How will your business be affected by the correction in real estate prices?
Just as a buyer expects higher discounts in a poor economic situation, in an improved economy he will be happy with lower discount rates. As our entire business revolves around buyers and not the supply side, the same applies to us.
What is the core concept that led to the establishment of Discountedflats?
The main concept is 'consolidation of the real-estate industry'. With this vision, we started bringing together first the buyers, then all the projects, followed by builders and then brokers - at present, we have brought about 3,300 brokers under the same umbrella.
What do you envisage for the company six months down the line?
We aim to hit 100 bookings per city per month, reaching about 1,000 bookings per month with an average ticket size of about Rs 40 lakh. Our annual sales of flat value are expected to hit $1 billion starting January 2012. We also plan to reach out to Jaipur, Kochi, etc, in the future.
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