Alibaba Launches New Online Housing Platform
E-commerce giant Alibaba Group Holding Ltd. launched an online housing platform in a partnership with real estate service provider E-House (China) Enterprise Holdings Ltd., joining a rush by tech companies into China’s booming property market.
The new platform, Tmall Haofang, will allow property developers, agents and financial institutions to seek partnerships and offer services. Alibaba will provide technology support such as online transaction and data analysis for players on the platform, while E-House will assist agents and brokers in customer acquisition, marketing and deal-making, said Zhou Xin, founder and chairman of Hong Kong-listed E-House.
The new Alibaba-E-House platform will charge businesses for services, Zhou said. Properties that can be traded on the platform include newly built and previously owned properties, as well as assets auctioned by courts, Zhou said.
Internet giants are piling into China’s massive and rapidly growing housing market, although most of them are still exploring a profit model. Last year, ByteDance Ltd., the owner of popular short-video app TikTok, acquired full ownership of Xingfuli, an app that helps users find properties for sale or rent. In May, Alibaba’s rival JD.com launched a realty unit to sell new houses online.
China’s housing market is expected to grow at a compound annual rate of 6.6% and reach 30.7 trillion yuan ($4.5 trillion) in 2024, compared with 22.3 trillion yuan in 2019, according to a report by independent research firm China Insights Industry Consultancy.
The new platform may set off a price war with a rival service backed by Tencent Holdings Ltd., analysts said. Just over a month ago Alibaba entered a strategic partnership with E-House, one of China’s largest real estate services providers.
The partnership between Alibaba and E-House targets rival Beike Zhaofang, analysts said. Beike Zhaofang also launched a platform for property brokers backed by resources from parent Lianjia Real Estate Agency Co. Ltd. and major investor Tencent.
Analysts predicted a price war led by the two platforms. E-House CEO Ding Zumin said Wednesday that brokers will be charged 3% of the contract price for each deal made on Tmall Haofang. That would be much lower than the average costs for brokers to work with platforms such as Beike Zhaofang.
The deal with E-House is seen as Alibaba’s effort to boost its presence in the housing market to further broaden its revenue sources. Currently, Alibaba mainly carries its housing businesses on Ali Auction, an online auction platform under Alibaba, which mainly hosts properties from judicial disposal, bankruptcy liquidations, or secondary houses disposed of by housing agencies.
E-House mainly provides agency services for real estate companies, such as formulating and executing marketing and sales strategies for residential projects. The company earlier said that collaborating with Alibaba would help it further penetrate the market and boost its online orders amid the Covid-19 pandemic.
Alibaba agreed July 31 to buy HK$828.1 million ($118.5 million) of E-House’s Hong Kong-listed shares, raising its stake to 8.32% from 1.97%. The internet giant also subscribed for HK$1 billion of E-House’s convertible notes, a type of debt security that the holder can convert into shares of the issuing company.
If the notes are fully converted, Alibaba will surpass Country Garden Holdings Co. Ltd., China Evergrande Group and China Vanke Co. Ltd. to become the second-largest shareholder of E-House with a 13.26% stake, only after Zhou. Alibaba is currently the fifth-largest shareholder of E-House.
Tang Ziyi contributed to the story
Contact reporter Han Wei (email@example.com) and editor Bob Simison (firstname.lastname@example.org).
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