The Evolution of Real Estate Transaction Space- Emergence of the ICPs

By Mr Ankit Kansal, MD & CEO of 360 Realtors

Indian Real Estate is highly unorganized & fragmented as the market is dominated by individual brokers. These brokers or agents either work as standalone units or in small set up. It is estimated that there are over 2 lacs brokers, spread across 10 major Indian cities.

Theoretically, the model works well as it is based on the personal connection between brokers & their network of potential buyers. However, the unorganized nature of the Indian Real Estate often results in buyers making the decision blindfolded. Brokers have limited resources at their disposal & hence it affects the quality of decision making. After all, Real Estate is a high involvement decision & ideally requires a lot of analytical approaches to figuring the most optimal choice.

The emergence of Search & Discovery Portals- A Remarkable Beginning

A wave of change was visible in the early parts of last decade when a host of new online Real Estate platforms such as Common floor, Magic Bricks, Makaan & 99 Acres emerged on the Indian Realty landscape. This was also a time when domestic & international venture capitalists were pouring big monies on the Indian start-up ecosystem. The prospect of the online models appeared very promising to the investor fraternity & they binged on them. Backed by attractive funding, these online portals which were also called the “Search & Discovery Players” scaled up fast.

These “Search & Discovery” were a remarkable change in the industry as they greatly solved the pressing need for information symmetry. They applied powerful algorithms to systemically store large chunks of Real Estate data on their servers. Now valuable information was available just on a click. They further deployed new tools such as – property & locality comparisons across predefined parameters, Home Loan & EMI calculators, price trend analysis & much more, thereby rendering a host of usable insights to the buyers.

However, despite being a major leap in the property transaction space, the “Search & Discovery Portals” were still unable to help the buyers purchase a home. As purely online models, they lacked a human touch. Real Estate is a high involvement decision & requires iterations of site visits & lots of consultation before finally zeroing down the right property. As a “Touch & Feel” industry, it cannot rely completely on the web itself. Thinking that Real Estate could be sold over an e-commerce site is still a distant deal.

ICPS leveraging O2O Model to Bridge the Gap

At the onset of the present decade, the transaction space was taken away by a new storm. Large sized brokerages emerged, which integrated the online & offline channels (O2O Model). Like their precursors, these players also called the ICPs developed powerful digital presence & attractive user interfaces backed by data & analytics. At the same time, they deployed massive sales force across the latitude & altitude of the country. Augmenting a powerful digital DNA with in-depth ground presence acted as a force multiplier.

By deploying large sales force, they were able to solve the pressing challenge in the transaction space- to close deals & help discerning buyers find their homes. ICPs such as 360 Realtors, Square Yards, Prop Tiger & Anarock (Earlier JLL Residential) started making notable revenue & expanded rapidly. After building firm ground in the Indian markets, they successfully entered the NRI space & tapped it successfully.

ICPs coherently adopted backward & forward integration to deepen their foothold across the value chain. At one end, they made tie-ups with credible Grade-A developers following a rigorous due-diligence process. For instance, at 360 Realtors we map developer & project credibility across a host of parameters- past performance, past deliveries, track record, adherence to timelines, reputation etc- before going ahead with a deal. A robust due-diligence has helped us to mitigate potential risks to a great extent & only sell good projects with no delays & challenges in deliveries. This has been very beneficial for our overall business.

On the forward front, ICPs have developed powerful CRM to ensure that the relationship does not only end at property closure. The CRM ensures that the home buyers are handheld throughout the value chain without any hassle. Interestingly, unlike brokers, ICPs do not charge anything from the homebuyers & only make commissions from the developers.

The Transaction Space will Continue to Evolve

The future of Indian Real Estate transaction space will be underpinned on the growth & evolution of the O2O model, popularized by the ICPs.  As the Indian Real Estate market is recalibrating under the influence of mass level policy changes, the market will further consolidate with ICPs playing a larger role.

The ICPs itself will continue to grow & evolve through various means- organically & inorganically. Apart from big metros, they are poised to grow in the Tier 2 cities as well, due to higher latent demand.  ICPs are also investing in disruptive technologies such as Big Data & Machine learning. Going forward, technologies will be a key differentiator in the USD 3 billion organized primary residential brokerage space. More investments will follow into other ancillary services such as home loan disbursal, strategic advisory & integrated marketing etc.

Likewise, ICPs such as 360 Realtors has their active broker aggregation programs, in which individual brokers are empanelling as channel partners. By coming on board with bigger advisories, brokers can leverage better marketing, technology & developer relationship facilities, thereby growing their revenues & profits. In return, as brokers are well connected in their respective localities, ICPs will also greatly benefit by acquiring new customers.

Corporate Comm India(CCI Newswire)