 "Home truths")
Five years ago, if I were to tell an average property buyer to book a flat online, she would most probably fail to fathom the idea. Cut to 2016, there has been a sea change in the consumer's perception. She is more open to exploring the possibility of engaging with a real estate brand interested in selling its offerings online, thanks to the mushrooming of e-commerce companies in food, fashion and lifestyle, taxi-hailing and classifieds among other categories 2011 onwards for simplifying online shopping by delivering the right consumer experience. As a result, transacting online for products and services has become a way of life for a sizeable section of India's 400 million-strong internet user base.
The Google India study, based on a pan-India offline research by Zinnov, sheds light on the influence of internet on real estate purchase decisions. The offline survey across 15 cities with over 6,000 respondents revealed that 74 per cent of realty research online was focused on residential buying and 26 per cent focused on residential renting.
Still, any established or new real estate company planning to sell its offerings online faces many challenges from the word go. First, the category doesn't lend itself to online shopping. While consumers are open to the idea of buying furniture and home decor items online, doing the same for property is approached with some trepidation.The good news is: despite these challenges, consumers and real estate players are engaging with each other. While a strong digital strategy can bring in the right engagement and conversion numbers, it is not the only reason for this change. In fact, for India's real estate market, the role of digital in the media mix gained prominence three years ago. Till then, it was all about following a simple high-decibel print, outdoor and radio media strategy.
After toying with the idea for a few years, we conducted the first experiment by selling affordable homes online on Google's The Great Online Shopping Festival in 2013. The success of the experiment gave us the courage to make further investments in this space including the launch of a home buying portal, an integrated payment gateway and tie-ups with established e-commerce players. So far, Tata Housing has managed to sell around 2,000 units online. In three years, as the industry tried to overcome challenges in selling properties online, major shifts in the category made the learning experience even more exciting.
Trust has gone up
In the last decade, major corporates have forayed into real estate. To some extent, this has given the right boost to consumer confidence. Less than a decade ago, buying a property largely involved dealing with small, unorganised players who were strong in the local micro-market. While investing in the projects of the established players, consumers can expect quality units, transparency and timely execution. This consumer confidence was substantiated last year when we saw more real estate companies tie up with e-commerce biggies like Snapdeal and 99acres for selling properties.
Millennials, the main target group of all leading companies, are now willing to buy properties online simply because it enables faster decision-making. Zinnov's research also establishes that buyers, who contribute to over 90 per cent of the real estate transactions in the country, have an annual household income of over Rs 5 lakh; a majority of these people are already using the internet today.
Projects now marketed pan-India
For the longest time, real estate advertising was all about showing an advertisement to the prospective buyer on nearby projects. By putting their offerings online, real estate companies have turned this concept on its head. Last year, a customer of ours from a tier-II city started looking for a property for his daughter based in Bengaluru. The daughter is currently pursuing post-graduation with hopes of a corporate career in the city. Without having to travel to Bengaluru, after going through all the available details on the project site and cross-checking for various details about the project through our sales team, he managed to book an apartment in Bengaluru. Now he gets monthly updates about the status of his project in his mailbox.
Research has pointed out that in tier-I cities over 57 per cent buyers are influenced by online research and in tier-II cities the impact is high with 48 per cent buyers saying they use the internet to look for properties. According to online search trends, the highest number of real estate queries in tier-II cities come from Pune, followed by Lucknow, Jaipur, Indore, Chandigarh, Coimbatore, Nagpur, Kanpur, Surat and Ahmedabad. Amongst the top metros is NCR followed by Mumbai, Bengaluru, Hyderabad, Kolkata and Chennai. As a result, real estate companies are marketing projects across metros and non-metro cities. This is the power of the internet.
Let the consumer take charge
At this point, the industry must understand that the choice of how far the online relationship can go rests with the consumer. She may want to pay only the booking amount online and take the rest of the transaction offline, or choose to make the entire payment online over a period of time, or simply choose to engage with the brand over social media. While online shopping in property is still in its nascent stage, it has the potential to change the game for real estate companies.
Brotin Banerjee
CEO and MD, Tata Housing Development Company
CEO and MD, Tata Housing Development Company
