MUMBAI: When the great online shopping festival took place last year, where everything, from a pin to a plasma television (quite literally) was sold online, little did people know that they would end up buying expensive items like cars or even a home, for that matter, through that medium. Today, it is not uncommon to see niche and high-value categories, such as jewellery, automobile and real estate, featuring among the best deals online. According to a Google estimate, the online retailing market in India will grow eightfold, from $2 billion in 2012 to $16 billion by 2016.
A newspaper published a report which said that Indians are slowly inching towards purchasing high value items via the online medium. So, while you did hear about buying jewellery online, today, you can go and buy a car or perhaps your dream home, with just the click of a mouse.
Sanjay Dutt, executive managing director- South Asia, Cushman & Wakefield, says, “Any real estate transaction involves a built product, which is usually not a standardised commodity. Though online transactions are a boon for today’s net-savvy consumers, it will be a tough task for them to adapt to the real estate sector, considering the necessity of viewing the property and/or its location, etc., in person, besides the involvement of multiple parties, enormous documentation work (which is not paperless) and managing the complexity of the transaction, considering the opaque nature of this sector. Moreover, real estate purchases are dependent on a number of qualitative factors such as the location, the neighbourhood profile, the availability of social infrastructure, accessibility, etc., making the transaction complex, as compared to simple online transactions such as flight ticket booking or electronic purchases.”
Realty going online – the must haves
The online medium helps the end user primarily on two fronts: discovery of listings – helping the user efficiently sort through the multitude of property options available, and research – helping an end-user to go through independent data/advice/reviews, about the locality, project, builder, etc. The accuracy of content, well-designed landing pages and a measurable call-centre/sales process to handle enquiries, are the minimum necessities when a realty company sets up a website.
It comes as no surprise that with the growing penetration of the online medium, the websites/portals of the real estate companies are required to be more user-friendly, so that they attract the visitor at once, and lead him to finding his dream home with ease. Ram Raheja, director and head architect, S Raheja Realty, shares that “A couple of points that should be focussed on when a realty company goes online, are ensuring that all the information is complete and the proper context is given. All the crucial details like the price, the total area of the house, the amenities, the locality, etc., should be given upfront; good, clear and relevant images are a must, as they add to the visual appeal; a step-by-step video that shows the gradual progress of the property should also be incorporated; and lastly, the availability of a 24-hour customer service executive with whom the visitor can get his/her queries answered; is the icing on the cake.”
Siddharth Bhatia, head of marketing, The Wadhwa Group, concurs and adds that “Digitalisation is clearly the future. E-commerce is big in the west and is catching up in our country as well. Real estate websites have become a one-stop-shop for buyers to do their preliminary homework, compare products, review locations and focus on options that are more or less likely to fit the bill for them. Essential pointers like elevations, location maps, project’s USP, existing site photographs and the state of permissions, are essential. One also needs to ensure that apart from the property portals, the company website and social media pages are updated with the latest information.”
Penetration of realty’s online medium: Tier-I versus tier-II cities
While the online medium has spread its wings far and wide in tier-I cities, are tier-II cities also catching onto it, when it comes to the brick and mortar sector? Sudhir Pai, business head, MagicBricks.com, says that “In terms of experience, the developers and agents in the tier-I cities have probably been exposed to the internet for longer and are now assigning dedicated teams, for handling their digital strategy. The top 8-10 cities in India, account for the lion’s share of domestic online traffic of the real estate sector. However, with fast growing internet penetration, smaller towns should be able to build up scale soon.”
Shopping is something that people, irrespective of their place, will always do. Online shopping is fast catching up in India, which has about 200 million internet users and is, expected to overtake the US, as the second largest internet user base in the world, by June 2014, with 243 million users. Advitiya Sharma, co-founder, Housing.com, feels that “As tier-I cities approach their point of saturation, in terms of real estate, a large number of developers have turned their attention towards the next best alternative, tier-II cities. The commercial and industrial expansion in these cities is a reliable pivot for real estate expansion. In terms of the online medium, e-commerce has definitely found its niche in tier-II and tier-III cities. However, it is too early to comment on the real estate sector’s penetration, in the online medium in these cities. As tier-II cities are dominated by local developers, traditional forms of home search are preferred. However, the real estate sector too, is bound to find a preference in the online medium in tier-II cities. In fact, smaller cities are popular destinations for second homes. Online searches are generally conducted by professionals from tier-I cities or NRIs.”
Rohit Gera, MD, Gera Developments, shares that “The online medium essentially lets the real estate company get onto a global digital platform, in the form of websites or mobile applications. Traditionally, home buying used to take place in a physical interaction form in the brick and mortar establishment. However, with the advent of e-commerce and retail web shopping, more consumers now, prefer to ‘surf’ their way to the marketplace. Since the online business is riding on the back of the internet connectivity, the penetration in tier-II cities is limited to the technical infrastructure and the users of this technology. Smaller metros are seeing better connectivity via the local telecom companies.
Some developers may choose to limit their online exposure to having a ‘brochure website’ which is a static set of pages, filled with information and pictures of the project while some go ahead and create a full-length project experiential website which engages the buyer to a high degree and pushes the probability of sale,” he explains.
Taking a slightly different view, Nimesh Bhandari, CMO, Realty-Compass, explains how the online medium is catching up in tier-II cities. “Thanks to smart phones and 3G penetration in small cities, builders are open to the medium, as they find it costeffective and more performance-led. Most of the builders who have delivered five or more projects have a website/web presence today. The online reach might not be that deep in tier-II cities, but the consumer who is online and is tech-savvy, is well-informed and if the experience of these consumers with the builder is good, they will spread the positive feedback about the concerned builder to others, via social media platforms.”
Pros and cons of the online medium: Focus real estate
With the world becoming a smaller place and people thronging to websites, for their purchases, the real estate sector is not far behind. The online platform is being used by the real estate industry for showcasing and creating awareness for their products and also for interacting and engaging with the consumers. Gera adds how “Third party online forums, review sites, social sites that provide reviews on the product quality or share experiences, are all influencing the buyer in some way or the other.”
Buying a home which is by far one of the most important and perhaps the most expensive purchase that an individual does in his lifetime, is being done ‘off’ the net. However, the flipside to this are the security concerns that come along with large value transactions. Hence, the internet is currently the best medium for most buyers, for researching the projects, comparing the features and price and connecting with the builder.
The online medium does reduce the hassle of visiting the site and physically looking at your dream home but in India, a large part of the buyers still believe in a visit to the project and having an actual conversation with the sales team. Sharma adds that “E-commerce, as a whole, is accepted and appreciated by people all over India. Smaller cities like Chandigarh, Coimbatore, Vadodara, Jamshedpur, lead in numbers, in terms of patrons of the online industry but when it comes to real estate, it is definitely the tier-I cities that serve the larger number of users of online house hunting. This is because its functioning has been refined by next generation portals. Tier-II cities do show the potential to become flourishing markets for online property portals. A recent e-auction of banks’ NPA properties saw 50 per cent of the demand coming from tier-II and tier-III cities. Whether buyers are receptive towards online property portals, also depends on the area’s industrial and corporate development. Residents of developed areas, will be more familiar with technological advances and will opt for the more convenient option – online home search. Modern portals are equipped with real photos, map-based property searches, neighbourhood information, etc.”
Praveen Shetty, VP-marketing, Shapoorji Pallonji Real Estate, is of the view that the realty sector hopping onto the online bandwagon, has several positives. “On one hand, online mediums help real estate brands target micro-markets, thus, reducing media spillage, while on the other hand, they remove geographical constraints of reaching out to target segments, across the world. There is a huge change that has taken place, especially in the realm of the real estate sector, where potential home-seekers check for project details online before visiting the actual site, so that they are doubly sure of what they want.”
The online medium has taken India by storm and has spread its roots deep into the buyer’s psyche. Today, everyone throngs to the online medium to buy books, clothes, etc., and wait for times when there are huge discounts that are being offered by these websites. However, there is a difference that needs to be looked into. Buying a home or a car happens to be one of the most expensive purchases in one’s life. So, while the old formats of buying a home which involves visiting a broker, going to the site and experiencing everything first hand, still remains strong; due to the rapidly changing lifestyle and young buyers getting busier, the trend of buying homes online seems to be fairly established, at least, in the metros of India.
For the tier-II cities, well, it is just a wait-and-watch scenario, when they too, will burst on to the online realty map of India, in the times to come!