Online real estate portal, IndiaProperty was recently demerged as a separate entity from its parent company, Consim Info, which operates BharatMatrimony, CommunityMatrimony, EliteMatrimony, among others. IndiaProperty claims to have over 4,50,000 listings and around 3 million users, and competes with 99Acres (Info Edge), MagicBricks (The Times of India Group*) and Makaan.com (from People Interactive/Shaadi.com). Ganesh Vasudevan, CEO of IndiaProperty, spoke with MediaNama about reasons for the demerger, post demerger plans, funding, partnerships, challenges, competition, among other things:
Why The Demerger
Medianama: Why you decide to make IndiaProperty, a separate business entity? How do you see IndiaProperty evolving as a company after this separation?
Vasudevan: We feel that the online real estate industry has great business opportunity since the business is moving from print classified ads to online. This shift has already happened in the jobs and matrimonial industries. Our demerger gives us the opportunity to give dedicated focus to the real estate business. If we were a part of Consim, there may be competing interest in terms of resource allocations etc. Demeger also gives us the capability to get funding, dedicated resources etc. Besides, the real estate industry is also mature. However, it requires investment to make use of the opportunity and grow, so through the demerger we will also be to attract investment to drive the growth
Medianama: Why did you decide to separate now and not 3 years ago?
Vasudevan: 3 years ago, the real estate market had not shifted online to a great extend and also the attractiveness of this space has gone up now. Also, at the time, Consim was focused on matrimony business. Now that the matrimonial business is established, we saw the opportunity in growing our real estate business. We re-focused in 2011. In the last two years, we have increased our topline 3 times, and become leaders in West and South, alongwith becoming the place to buy new property. We have also brought about several innovations: we have the only assisted search service where consumer pays us to shortlist properties that match their requirements. We also have an augmented reality app through which you can point in the direction that you want to look for properties and it lists available properties in that direction. We have reached 50,000 users on this app so far. We also launched a virtual property fair through the brand called grahapravesh, a forum where customers can ask any question related to real estate. Apart from we also provide legal assistance, verification, among others.
The Relationship between Consim Info & India Property
Medianama: Is IndiaProperty’s separation from Consim for real or just a separation on paper?
Vasudevan: It is a real separation. We don’t have any shared resources. For now, the board is the same. Once the new investors come in, the board will also change. However, the rest of the team, right from the CEO, the resources are different.
Medianama: Was the demerger done as a pre-IPO exercise for Consim Info?
Vasudevan: The demerger has more to do with Indiaproperty than Consim’s IPO. Demerger helps us get investment to expand business and better talent as well. These are clear signals of our intent to grow and expand. Besides both these businesses are in different stages of development. The matrimonial business has matured whereas IndiaProperty needs capital to grow. Demerger gives us the freedom to do it.
Medianama: What were the challenges that you faced with scaling when you were a part of Consim Info? How do you plan to overcome them now?
Vasudevan: Challenges were clearly resource allocation and management focus. For the last 12 – 13 months, we have been working quite independently even though the court order has taken time. Essentially, the customers we are handling are also very different. Matrimonial business is primarily B2C while IndiaProperty mostly handles B2B. The skill sets required are also very different. So the demerger has really helped us.
Medianama: What is Consim’s stake in IndiaProperty?
Vasudevan: Earlier investors in matrimony have invested in Series A in The stake structure is similar to Consim, however our series A investors will get additional shares in the company. I wouldn’t want to reveal Consim’s stake or investors stake in the company.
Medianama: What do you plan to do with the latest round of fund raised?
Vasudevan: The demerger only happened in March although the company has been functioning independently since last year. We were planning to invest this fund in technology and marketing especially in tier ii towns where real estate is picking up. Very soon, we will be looking at series B to further invest in the technology and marketing of our company.
Monetisation & Partnerships
Medianama: How do you monetise your website?
Vasudevan: Monetisation is mainly through paid ads by people in the real estate ecosystem. We also work on customised marketing solutions for new launches, transaction services, assisted searches, among others.
Medianama: What kind of partnerships do you have with property owners, real estate agents and real estate developers?
Vasudevan: We have over 2000 builders who advertise with us. We have partnerships with category A builders to help market their properties and also 75,000 agents who use our services. Agents list their properties and pay listing fee. In addition, rental packages are also sold to agents because they usually work on both property sale and rental. We offer listing and branding products for both these services giving them flexibility to choose what they want to project.
Competition & Marketing
Medianama: How has competition affected your business? How do you plan to position yourself as a separate entity with edge over competition?
Vasudevan: We have successfully built our company around the new properties space. We have the maximum number of new properties listed in the top 10 cities in the country. Online spends is still a small part of the real estate industries spends on advertising. We believe it will increase over time.
We are building our franchise in terms of listing packages as well. Marketing is required to build the brand in the north and east. That’s the reason why we are actively seeking investments. Our assisted property has found interest with NRIs so we are looking to market the service to NRIs in the middle east, U.S and other countries.
Medianama: How do you plan to compete with Magicbricks and 99Acres which have a headstart?
Vasudevan: I think we have started off on a good note with focus on new properties. In five years, the supply will be still short of the projected property requirements. So we are focusing on reaching out to agents to build an ecosystem in the south. The marketing will also help us compete well. Our USP is to help customers in the search process, not making them do a self search.
We are looking at more trade shows and Above The Line marketing. We have done Below The Line marketing well so we are looking at mass media this time. We are leveraging the NRI strings we have by virtue of BharatMatrimony. We have done a trade show in the US which had good response. Most of our strategy is going to be focused on getting new individuals to use our services.
Medianama: What are the challenges in online real estate or property segment?
Vasudevan: The primary challenge is to get validated information especially from agents because agents don’t share lots of information while users don’t want to use agents. While we have validation mechanism at the backend, 80-85% is validated, the rest is what the builder wants to communicate. The challenge is to collect this information and balance the needs of the builders and the end users. We trying to push for 100% validated information. Real estate is by and large a touch and feel decision and for most Indians, it is a ‘once in a lifetime’ decision which is requires lots of offline interactions as well. We cant do it entirely through online. The industry needs a hybrid model which we have adopted quite successfully. It becomes more difficult with second hand properties where like mentioned before agents don’t give all the details.