Property market cooling trend of SouFun crisis

In the past month, SouFun plunged into an unexpected crisis. Hangzhou brokerage joint search room listings first, as the search room port costs continue to protest prices. Subsequently, many agencies in Qingdao, Shenzhen and Dongguan all formed "wartime allies" one after another, unanimously cracking down on the issue of collecting fees for soufunking.

In mid-June, Mo Tianquan, chief executive of SouFun, bowed to the agent and announced that he would lose 40% of the "port fee" and cancel the double charges on the computer and mobile terminals.

Although the capital market's reaction to the slump in search of stocks is not optimistic, its stock price dropped below $ 9 and its market value has shrunk by more than 30% in a month. (Note: SouFun shares have started to rebound recently, closing the SouFun price of $ 10.3 by July 1).

Soufun's price-cutting policy, however, largely aroused the anger of intermediaries, after which the Shenzhen intermediary, which followed the uprising, also reached a settlement with Soufun.

However, a new problem is that the real estate listings business has accounted for 25% of the revenue of soufun. Under the environment of the property market cooling down, Soufun should achieve business breakthrough without hurting the offline intermediary.

Conflict: the property market slump Soufun Meng earned

According to Tencent Technology, soufun was surrounded by intermediaries, nothing more than in the downturn in the real estate environment, the search room too high port costs and intermediary company's income formed a clear mismatch.

Mo Tianquan in the previous internal mail, reflect on this phenomenon, "This year the second-hand housing market fell heavily, some brokerage losses, and the market did not pick up signs, but Soufun profit is still strong, there is a quarter of profit 40 In contrast, we have been advertised for the purpose of common development with brokerage firms, and did not reflect the results of the search and brokerage firm's business results, the search room earned, and earned unreasonable and more, on the contrary some brokers The company lost, but also losses unreasonable and more.If SouFun yet price, and even through innovation to increase the charges and price increases in disguise, I think the brokerage company is justified to encircle us.

The first half of this year, the real estate market has experienced an unprecedented difficult period, the macroeconomic downturn, real estate credit continued tight, resulting in the real estate market has entered a significant adjustment phase. Among them, the second-hand housing market has been more intense impact, some cities second-hand housing turnover fell more than 50%.

Take Beijing as an example. In the first half of this year, the volume of new home transactions in Beijing will hit a new low since 2006. According to Beijing Central Plains and other agencies statistics, as of June 29, net of protection of housing, commercial housing in Beijing in the first half of this year deal 23,163 units, 2.76 million square meters, down 39%. The second-hand overall turnover is not optimistic about the situation, the Beijing Municipal Construction Committee data show that, as of June 29, first half of 2014, Beijing second-hand housing a total turnover of 43,841 units, compared with 54% reduction over the same period last year.

June "uprising" intermediary companies, are relying on second-hand housing transactions for a living. In the downturn of the market environment, Soufun port costs will inevitably lead to such conflicts. SouFun early only provide 60 version, 120 version of the port, and later have introduced a 180 version, 300 version. Different ports for the intermediary means "refresh volume", the higher the version refresh rate more, the availability of listings information more frequently appear in the corresponding position. Online major agencies under intense competition at the same time the housing homogeneity of serious cases, the intermediary only desperate to brush house, in order to get enough online source.

I love my family revealed that over the past five years, SouFun's port package costs rose 60 yuan / month to 600 yuan / month, up 10 times, the intermediary in the network port to pay almost double every year. SouFun was able to continue the price hikes, but also from the white-hot competition brokerage firm offline. According to statistics, there are over 50,000 real estate economy companies in the country with over 1 million employees. Low barriers to entry, service homogeneity, making search room in the intermediary agencies have a strong bargaining power, the result is a rise in port costs.

In the first half of this year, the trend of the real estate market has changed, bid farewell to the rapid growth in the past few years. Not only the volume has shrunk dramatically, but the prices have also dropped partially. In 2008, the property market also experienced a similar desertion. At that time, several intermediaries in Beijing also unite with SouFun bargaining.

Soufun and intermediaries interdependence will continue

Market concerns Soufun, mainly from Soufun this conflict with the agency is irreconcilable. However, according to Tencent Technology, the current situation of interdependence between the two parties is difficult to change.

Industry sources, intermediaries is very difficult to throw off the soufun, the industry has many large-scale intermediary companies have launched their own website. However, due to lack of traffic, the ability to import customers is limited. Although the company is pushing its own products, the grassroots brokers still depend on third-party websites for customer sources.

The data reflect the agency's dependence on SouFun. By the end of 2013 SouFun had more than 190,000 paid brokers, down from 130,000 by the end of 12.

21st Century Real Estate CFO used "symbiosis" to refer to the relationship between a third-party website and a third-party website. "Third-party websites bring browsing and source to intermediaries, intermediaries use third-party websites to publish listings and provide transaction services Soufun and other third-party websites with their own clear market positioning, the intermediary companies use the Internet to facilitate the transaction played a larger role in promoting. "

At the same time, Soufun can not replace the offline agency, Mo Tianquan clearly stated after the turmoil in the agency, Soufun never be an intermediary.

Industry sources, real estate transactions such bulk non-standard products, it is difficult to bypass offline service links directly through the Internet. Zuo Hui, chairman of chain said, "We are sure that the role of brokers can not be replaced in the future for the industry potential change forces mainly come from the Internet, the industry is difficult for the Internet too few target customers, The depth of the request is too high. " The 21st Century Real Estate CFO also stressed that the real estate website can not completely replace the line, "because offline brokers provide more than just goods, it is service."

At least for now, intermediaries and soufun are inseparable from each other. From the reaction of intermediaries all over the place, the agency's attitude toward housing search is not completely boycott. As long as the price is acceptable, the intermediary is still willing and needs to cooperate with the third type of real estate website such as soufun.

Second-hand housing market downturn, search room how to do?

Tencent Branch understands that SouFun's current three-block revenue structure, display advertising and e-commerce services are aimed at first-hand marketing, earning developers money; only listing services (derived from the second-hand Room, which is the second-hand housing agency release port charges.

In 2013, SouFun advertising revenue of 278 million US dollars, e-commerce revenue of 188 million US dollars, housing revenue of 161 million US dollars, this one accounted for 25% of total revenue.

Although the proportion of second-hand housing revenue is not high, but the second-hand housing business in the good years of the housing market usually have very high growth. According to the analysis of industry insiders, major cities in China will successively enter the era dominated by second-hand housing. The volume of second-hand housing transactions in first-tier cities has already surpassed that of new houses, with the volume of second-hand housing transactions in major cities in the second-tier cities currently accounting for about 40%.

In 2013, SouFun second-hand housing listings posted triple-digit growth, up 121.7% YoY. However, in 2009 and 2012, the two price difference between the years, Soufun second-hand housing business growth of only single digits.

The volume of second-hand housing transactions in the first half of this year was light, and the growth of the listings release business is expected to be not less than the decline in 2013. At the same time, to the intermediary "discount" will obviously affect this income. In the case of sluggish second-hand housing, soufun what to do?

Soufun, while struggling to calm second-hand housing flats, has also been releasing the "wind" of new businesses, including the financial services that went live in the second half of last year and the community-based O2O strategy, which is not yet clear-cut.

It is clear that in the overall downturn in the market environment and the port discounts on the case of soufun this year's second-hand housing business is indeed worrying. However, the relationship between SouFun and intermediaries can not be said to be a "break," but only the redistribution of interests during the period of market adjustment. Soufun a series of new business promotion, we can see that in the case of sluggish growth in second-hand housing, trying to borrow a new home business to achieve a new growth.

One of the more noticeable is that soufun flagship "a second-hand linkage" of the new housing business once again in all parts of promotion. Since August last year, SouFun has been launched for brokers in more than 30 cities nationwide.

The so-called a second-hand linkage, after the line of intermediary companies have tried, in fact, second-hand housing brokers involved in primary housing sales. Property market downturn in late 2011, many real estate through joint second-hand housing agents to sell new homes. This "a second-hand linkage" in the market is not good, to activate the resources of brokers and promote new home sales. At the same time, second-hand housing agency brokerage, will get a higher commission.

If the first-second-hand housing can really "linkage" up, then developers can sell the house, intermediaries get higher commissions, soufun can also take a slice of it. However, this idea still needs to be verified in the environment of cooling the property market. At least the cooling of the property market at least three years ago failed to make any success in the industry.