Top Online Property Sites In Japan + Funded Startups
Real estate industry is one of the market that I like because it is a traditional market that can be enhanced greatly by utilizing technology. There are many businesses involved in this industry so strategies of companies trying to add an internet aspect differ from each other and it is interesting to learn the market situation through their initiatives.
In SEA, there are startups such as PropertyGuru, 99.c0, UrbanIndo and Zipmatch that are well funded and I recognize that there are also more giant players in India. In fact, 99.co raised $7.9 Mn from Facebook co-founder Edurado Saverin and Sequoia Capital India just few weeks ago.
Seeing the real estate market heating up in SEA, I’ll introduce some market data and players in Japan to provide a benchmark.
Do people buy houses? Or do they rent?
Firstly, to give an image of the market condition, nearly 59% of the houses in Japan were owned houses as of 2013.
As the government has been pushing the home ownership policy for a long time, owning a house has been a common thing in Japan but the decrease in population, changes in family structure and reduction in income, especially for the middle class, are starting to make a change on how people choose their houses. I personally see that the $11Bn rental housing market need solutions that will correspond to this market change and increase the efficiency of the matchmaking, especially for people living in urban areas.
Another reason why I’d like to focus talking on rental housing market is because 70% of people who rent a house move to a new house within 4 years (excluding families and people over 65 years old) whereas people who own a house live at the same place for about 20 years, meaning that this market provides more opportunities to emerging startups to compete with legacy companies.
Online Property Site Players in Japan
1.Online Search (Advertisement model).
HOME’S and SUUMO are the two top property search site in Japan. Although their listing looks somewhat alike, HOME’S executes a different business model from SUUMO. SUUMO’s model is an ordinary listing advertisement whereas that of HOME’S is a combination of a listing ad + a cost per inquiry ad. It is obvious that HOME’s revenue dropped after it changed the model in 2012 but its strategy is to build the №1 branding for property search in Japan. The number of users is not disclosed so I’m not sure whether its the №1 but it surely is one of the top 2 search portal today.
Also, there is a startup called Cashback Chintai who started to do a CPA model from 2013. It allows agents to list properties for free and only charge after the contract is signed. Part of the fee that the agents paid is transferred to the users, providing incentives to users to make them choose to sign contract through its site.
2.Sites Run by Apartment Leasing Companies or Their Subsidiaries
These online sites tend to have less number of listings compared with advertisement model sites. Most of them list properties owned by themselves or by their group companies so it works more like a marketing channel for them.
One site that is not showed above but that I like looking at is Ken Corporation. It is an private company operating for many years and it focuses on high grade properties. Because they have direct relationships with owners, they have some inventories not included in REINS, a real estate data base in Japan, and also have good pictures that make you imagine how your life would be if you live there. One of the property I like in Japan is this;
3.Japanese Startups
If you include other businesses such as review portals for apartments and online private viewing services, there are several others but I just focused on startups that are closely related to the rental housing market.
Real estate space tends to be very fragmented and in countries like Japan where there are several giant developers with multiple subsidiaries, it is usually difficult for new players to scale their business. However, as I mentioned earlier, the market condition is changing and if startups can quickly adapt to that change and become strong in certain vertical, I feel that it is still possible to succeed because real estate industry is not yet a transparent market. For the same reason, our fund have invested in ietty and a Korean online office brokerage as well, so very look forward to seeing our portfolios give it a try!
