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We don’t think real estate will ever be bought online – Info Edge CEO Hitesh Oberoi



“We don’t think real estate will be bought online ever,” Info Edge CEO Hitesh Oberoi said during the company’s Q4-FY15 earnings conference call, responding to a question from an investor who asked about whether 99Acres has plans to go beyond resale of property and new rentals. The investor pointed towards Snapdeal and Housing, which have entered the transactions side of the business; Snapdeal has a partnership with Tata Housing for selling real estate online.Note that Snapdeal recently announced that it sold a property worth Rs 1.1 crore online, and received 1800 purchase inquiries. NDTV has more, here.

Oberoi said that 99Acres is “already in the new homes business, we are already in resale, we are already in rental, we do not do transaction.”

“Because to do a good job of serving the real estate market in a good year, you need to be in the new home market. If there are lots of launches, the new home segment may do well in a not a so good year. People (tend to) shift towards ready to move in apartments, and if interest rates are high then often they move towards rental, but the same consumer may come back and buy a house tomorrow. So, I think it makes sense to carry everyone along – that is the broker who has paid, the dealer who has paid, you know all of them do new homes, all of them do rentals, and all of them do resale as well.” 99Acres recently introduced a new home platform on its site, which allows builders and developers to showcase new homes.

– Investing aggressively in sales, branding, marketing: “We have invested substantially in product development in user experience, in analytics, in improving the data quality on our site in operations. We continue to invest aggressively in our sales effort. We are now investing in branding as well and marketing as well. We now believe that we have almost all the building blocks in place,” Oberoi said. He added that due to this he expects 99Acres’ losses to go up over the next few months.

(Also Read: It is very hard to predict what is going to happen in Q4 in 99Acres – Info Edge CEO Hitesh Oberoi)

How is 99Acres using the Rs 750 crore it raised last year:

“So we have not sort of said that this is what we are going to spend on each of these areas, because that will often depend on competitive activity and what our teams are able to come up with and the opportunities available for acquisition. But we will say, broadly there are seven or eight areas in which we are investing.

– Sales of course: we already have a large sales team on the ground and we continue to sort of expand that.

– Branding and marketing will be a substantial part of our spend as well.

– Then of course product development: we made significant strides on our product but we need to do a lot of more so we will be spending substantially on that front.

– Mobile: it already (accounts for) more than 40% of our traffic and we will continue to invest aggressively on the mobile platform.

– Analytics, user experience and data quality: data quality is a big piece for us and we already have a team of 300 verifiers on the ground. This team will be scaled up.

– There are a lot of other stuff we are doing at the back end to sort of improve the user experience, and to improve the data we have on our platform.

Note that 99Acres monitors resale traffic, traffic of people interested in buying new homes, rentals, traffic by city, number of unique who visit the site, the frequency of their visit, number of inquiries, number of unique inquiries, quality of inquires. All of this leads to the data quality Oberoi has mentioned.

Activity in real estate market down 40-50%: “The real estate market is going through a lean patch. Demand for new homes, specially markets like Noida, Gurgaon, Mumbai and Hyderabad, continue to be weak. Hopefully as the economy improves and as the jobs market also picks and as interest rates go down, the real estate market will start responding as well,” Oberoi said.

(Also Read: How 99Acres plans to use the $120 million it has raised)

Other notes from the concall

Financials: Net sales for 99Acres were at Rs 30 crore, up 30% year-on-year (YoY), for the three month period ending March 31, 2015 and the business reported an EBITDA loss of Rs 8 crores in Q4, owing to “continued investment in sales teams, service, product and technology, the cost of which is expensed out in every quarter.”


– Paid listings in Q4 were at 6.6 lakh versus 5.3 lakh in Q4 of last year.

– Mobile traffic was around 35% of total traffic in Q4, and the company claims that it currently is in the 43-44% range.

– 99Acres heacount: 1700

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