New York Stock Exchange-listed Soufun (NYSE:SFUN) is the leading residential real estate portal in China and made $637.38 million last year, mostly from helping Chinese real estate developers and agents market properties through banner advertising on the site’s home page.
What Baidu has been to search, or Tencent to messaging, Soufun, which was founded during the first China Internet boom in 1999, has been to home-buying in China. In all of its glorious 1990s banner-ad driven glory.
However, Soufun’s easy life at the top of China’s online real estate world may be changing as Leju, an online platform produced by leading Chinese real estate agency E-House has now teamed up with both Tencent and US real estate search site Zillow to create new real estate websites in China.
Changing International Properties Marketing in China
According to an announcement by Zillow today, the US real estate website has joined with Leju to power the new company’s U.S. home shopping experience.
Beginning in early summer 2014, Leju visitors searching for US properties will be brought to a Zillow(R)-Leju co-branded website where they will have access to Zillow’s home search service, data on recent comparable sales, and listings that include detailed maps and images from Google’s street view. The new co-branded site will be translated into Chinese and operated by Zillow.
For Soufun the Zillow news means serious competition for its budding business pushing US home developments to its existing Chinese user base. For startups such as Juwai.com and Meiaoju.com that are hoping to make a play purely on the growing trade in sales of international properties to wealthy Chinese, it could mean tough competition from this partnership of Chinese giants with a high-tech US player.
Bringing Web 2.0 to China’s Home Searchers
The cooperation between E-House, Tencent and Zillow also has implications beyond the market for international properties, and could force real change in how Chinese buyers shop for homes online.
Two weeks ago, Tencent, which is China’s largest internet company by market capitalisation, agreed to spend $180 million to acquire a 15 percent stake in Leju. Tencent President Martin Lau said at the time that the strategic partnership would bring real estate information to users of Tencent’s WeChat mobile app, and allow Leju users to make use of Tencent’s online payment services.
Leju’s parent, E-House China, in addition to being the country’s largest residential real estate agency, is also the leading provider of data on home sales.
More importantly, particularly as China’s real estate market enters a period of slower growth and greater risk, the new partnership could allow Leju to make use of Tencent’s tech muscle to build more powerful websites that allow users to access E-House’s real estate data to evaluate properties. Just like Zillow does in the US.
For Soufun, which has been making money since 1999 on sales of very 1990s style banner ads to cash-rich real estate developers, this new level of competition means online marketing of homes in China is becoming a new game, and its days of being the home team may be numbered.