MagicBricks.com is an online property portal from Times Business Solutions, which provides property listings, advice and news on buying or renting properties. Earlier this month, the website launched locality pages with rates, photos, maps and other media and last month, it had introduced a luxury section to list premium high end luxury properties to its users.
The website also has a home decor section, which the website had relaunched in December 2012 in its new avatar. We spoke to Sudhir Pai, Business Head of MagicBricks regarding the launch of these new features, response to their website, profitability of their business, among others.
Local Search and Other New Features
Medianama: Why did you decide to launch new local search features on your website? What is the consumer need for these features? What kind of research did you do to conclude a need?
Pai: We were keen to migrate more offline processes onto our online platform. The primary purpose for neighborhoods feature was to eliminate wasteful site visits. Therefore, we decided to show them videos and photos showing how a locality looks like and pricing among others, thereby providing a good sense of what the locality is. The site also offers reviews and ratings of these localities. Primary objective was to make house hunting more convenient by making them use more services online. As far as research is concerned, we constantly do user need gap analysis as part of our product development and we keep checking what features are being used by visitors and are not being used, through various channels that feed this data to us.
Medianama: What are the advantages of these features for you as a company? What was the cost of introducing these features on your website? Are you looking at monetizing these features?
Pai: It was a considerable cost and investment to company. We had people go on field and shoot thousands of photographs which was expensive. However, we believe that the quality of leads would improve significantly for sellers through this feature. There will be lesser contacts made but they will be quality contacts. Hence the benefits to our website is also immense, however we are not looking at monetizing these products separately as of now.
Medianama: What are the features that you plan on launching? Why do you plan to introduce them?
Pai: We have a good product and content team that help us do anywhere between 8 -12 product releases in a year and we aim to release at least one new feature every month. In the last three weeks, we launched the searches, neighbourhood features and also our e-book called Magicbricks.com’s Guide To Buying A House, which is available for free at the moment.
Online Integration of Offline Processes
Medianama: What is the difference between the behaviour of people finding properties through offline and online sources? What are you doing to include more offline processes on your online portal?
Pai: Online users are far more knowledgeable. Offline resources typically includes only family, friends or agent/broker, however online users have access to these offline resources and as well as online resources like research on properties, forums, among others to make decisions.
However, we noticed that end users currently us an online property portal as part of their early buying search or at least that’s how consumers have traditionally used online property portals. We have mapped user’s buying cycle to take several steps of the cycle online and hence we have moved three steps ahead like short listing properties based on the locality type and house type among others.
We also do significantly more than just offer search listings. We offer advice to users, help them compare two houses or tell them about the locality that has performed well in terms of locality. Besides, there are several features on MagicBricks to check market performance and advice on buying houses. Even in listings, we have tried to focus on providing depth to users. For instance, the Neighbourhoods feature gives a sneak peek into what the locality is, which eliminates the early site visits for prospective buyers.
Medianama: How are you planning to bring offline users online?
Pai: Good product and content attracts people and we believe that itself should be a huge magnet to bring people online. Awareness is also important since property portals is still a young sector, which is why we are investing on marketing as well. Due to this, traffic on a property portal like ours is growing 60%-80% year on year (YoY). We believe this growth rate will sustain for several years. Our plan is to create a good product and content platform and spread as much awareness as possible around this.
Medianama: What is the rate at which searches on your website convert into purchases?
Pai: Essentially, the buying cycle for a house could go up to six months, whereas a user may come to the website for 15-20 days for renting a house. We don’t have the data on the number of people who end up buying a house.
However, we ran a consumer survey of people who were on our website in the last 6 months and got a map of the purchases. We found that 25% of them actually made a purchase. People who come looking to buy a property are sometimes serious buyers, while some of them are just researching and some of them are investors fishing for a good property to invest.
It is safe to assume the same number or higher for renting, since when it comes to buying, people don’t actually buy on every visit unlike renting.
Medianama: What is the cost of collecting property data? Does your revenue justify the cost of collecting this data?
Pai: We don’t collect offline property data. It is usually done by smaller players in the market. All properties listed on our website are listed by agents and consumers, so we don’t have specific costs for data gathering. We only market our services.
Medianama: How does it make sense for you as a brand to diversify into home decor, news and home loans, instead of purely focusing on property listings? Is property listing not sufficient to make profits?
Pai: We don’t see it as diversification. These are different parts of the same buying cycle. With property listings, a portal will address only 10% of the target group. There are consumers who come on MagicBricks for search and listings, some visit our site for only advice while there are others who have a very strong broker but want independent advice. Hence, focusing only on listings won’t help a portal cater to the entire market.
Of course, listings is the bread and butter of the portal and it is how our revenue model work. But if we launch other services, users make better use of MagicBricks. Today consumer is using MagicBricks for several services and we also seem to attract people who were not using property portals earlier. So by doing other things, we are reaching out to users beyond that 10%.
Only category that is probably a diversification, would be home decor. The reason for doing it really is to keep in touch with our consumers. You buy a house probably once in a life time so home decor was a way of keeping in touch with that buyer. Even if you bought a house a year ago, home decor is an ongoing need for us to keep in touch.
Medianama: How profitable is your business?
Pai: MagicBricks is doing quite well right now but online property listings is still a smaller and under penetrated category under classifieds. But, it is also probably the fastest growing category in that segment, which is why it makes sense for us to focus only on top line and get traffic on site at the moment, rather than focusing on profitability. In the next 4-5 years, we believe this would be the biggest classifeds category, bigger than even matrimony and online recruitment.
We are already number 1 in this category according to the comScore metrics and we have the capability to generate profits anytime, but our current focus on expanding the category, rather than profits since it will anyways flow down the line.