Differences between markets in Malaysia and Singapore
Mobile looks set to lead the next charge
IN December 2007, two expatriates in Singapore – Steve Melhuish and Jani Rautiainen – launched their PropertyGuru portal, hoping to address what they saw as a vacuum in the island republic which at the time did not have any online property sites.
That quickly changed within a few months, with a Malaysian property portal setting up a Singapore portal, while two of the biggest media groups there launched online classifieds sites with real estate listings too.
As Melhuish recalls in our previous installment, PropertyGuru managed to stave off the competition and establish an 80% market share within three years. Having cemented its leadership position, and with a host of accolades and awards on its mantel, the company was now ready to look at the regional market.
Which led to one of its biggest mistakes, says Melhuish (pic).
“In terms of mistakes, one of the big ones we made was that we spent the first four or five years building Singapore, then in 2011 we went into Indonesia, Malaysia and Thailand – from one country to four in 12 months.
“The whole organization was structured to do only Singapore, but suddenly we were stretched. We really stressed a lot of people on the team,” he adds. “That’s probably one of the main lessons we learned – not to try and run too fast, to phase it out.”
But the crazy move paid off – in both Indonesia and Thailand, PropertyGuru has established itself as the No 1 property portal, while it is in a very strong No 2 position in Malaysia, which has had property portals plying the market for a few years already.
The rapid regional expansion “helped us build a platform that allowed us to grow very rapidly, which led to the investment by Deutsche Telekom in June, was one of the largest online ivnestments in South-East Asia,” says Melhuish.
“It was a validation of not only the online property market here, but also of what we’ve managed to achieve in the last five to six years,” he adds.
Malaysia leads regional expansion
In preparing for a regional play, the company researched the property markets here, including those in Hong Kong, India, the Philippines, Taiwan and Vietnam, before settling on the South-East Asian markets of Indonesia, Malaysia and Thailand.
PropertyGuru entered these markets through acquisitions -- Fullhouse.com.my in Malaysia, DDProperty.com in Thailand and Rumah.com in Indonesia.
Entering Malaysia was pretty much a no-brainer, since PropertyGuru had been building relationships with developers here since its inception, putting Malaysian developers in touch with Singaporean buyers.
“There was a lot of Malaysian traffic into Singapore, a lot of Singapore traffic into Malaysia; a lot of Malaysians were buying properties in Singapore, and a lot of Singaporeans buying property in Malaysia.
“So there was this heritage and the relationships were already here,” says Melhuish. “There was only really one player, which seemed to be increasing prices every six months, and we saw there was an opportunity for a competitor.
“We spoke to developers and agents here and asked them what they thought of us coming in, and they were very supportive, saying they wanted choice,” he adds. “The agents were enthusiastic – it was obvious we should go into Malaysia next.”
Fullhouse.com.my was a Penang-based property portal, which dealt in both residential and commercial property, although the bulk of its business was in the former, primarily in Malaysia’s northern states.
“Coming into the marker relatively late, we wanted a stronger footprint and a differentiated proposition, and nobody else was focusing on northern Malaysia,” says Melhuish.
However, the bulk of transactions and people interested in property were in the more central Klang Valley, so PropertyGuru started its business there as well with HomeGuru.com.my – the domain name PropertyGuru.com.my had already been acquired by a competitor, so it was a while before the company got that back.
HomeGuru was formed out of a joint venture agreement with the Redberry media company which manages some cross-media platforms. Earlier this year, PropertyGuru managed to acquire the ‘.my’ domain and consolidated the two portals, rebranding it as PropertyGuru.com.my, with a staff strength of 45 currently.
“Very quickly in the first year, we managed to sign up 3,500 agents,” says Melhuish. “We’ve positioned ourselves to focus on the agents, to really help them and give them a second choice, basically.
“We’ve invested very heavily not only into the brand and the platform, but also in developing applications for the agents,” he adds.
One of the challenges for PropertyGuru coming into Malaysia from Singapore was in dealing with the differences between the two markets.
“The property industry is always very local,” says Melhuish. “In Singapore, most of the developers work with two or three agencies to sell property, and there is less opportunity to work with the developers directly.”
“Malaysian developers do far more themselves to sell directly, so we can work with them,” he adds.
The Malaysian market is also a lot more fragmented, unlike in Singapore where there are three or four very large agencies with 3,000 to 5,000 agents each.
“You just need to tie up with one or two agencies, and you’ve got the whole lot,” says Melhuish. “In Malaysia, the largest agency would have about 900 agents, so you’ve got a lot more smaller agencies you have to work with. You have to run around a lot more and work a lot harder.”
The agencies are also more spread geographically, much like the property market itself, which adds to the need to run around a lot more.
However, the Malaysian market has one big positive. “Compared to Singapore, it was essentially a breath of fresh air really, to work with the companies here because they were a lot more open to new ideas,” he says.
“The typical conversation with Singaporean companies over the last five years was ‘No, no, no.’ In Malaysia it was, ‘Not sure, but I’ll try. Hmm, it works … I’ll carry on.’ It was a very different mindset, and in terms of doing business, more pleasant for us,” he adds.
Malaysia is now PropertyGuru’s second largest market and is the fastest growing in terms of traffic and revenue. Not only are the hubs of Penang and the Klang Valley important, but rising fast is the Iskandar development hub in the southern state of Johor, which sits north of Singapore.
“Singaporeans are very hungry for Malaysian property, mainly because property in Singapore has become crazily expensive, about five or six times’ what it is worth in Kuala Lumpur,” says Melhuish.
In fact, PropertyGuru had just organized a ‘Malaysia Property Show’ on the weekend of Dec 8-9.
“Typically, we have about 1.000 people come through the door at our Malaysian showcases, and about 15-20% will buy,” he claims.
The number of transactions via the Singapore portal is still very high, and taking into account the higher value, Singapore will continue to be the leading market for a while more.
“This year we doubled our revenues in Singapore, and we still expect 50% growth next year,” says Melhuish. “However, we expect the Malaysian market to overtake Singapore within three years.”
PropertyGuru is now the No 1 property portal in Indonesia, Singapore and Thailand, but is still No 2 in Malaysia (click chart to enlarge). When does it expect to become No 1 here?
“Within two years, I guess,” says Melhuish. “The gap has closed fast within the last 12-18 months, but there’s still a long way to go.”
In the meantime, in terms of its regional play, the company will be working on consolidating its position in the markets it’s already present in.
“I don’t see us expanding to other markets in the next 12 months. There’s more stuff we need to do for the markets we’re in,” says Melhuish.
“We need to build on our market position, go further into mobile, innovate on the side, and provide more content and transparency in the market to help people make property decisions,” he says, adding that PropertyGuru publishes about 600 articles every month on property news and research.
Indeed, mobile spells a very big opportunity for the company. It had been expecting the Singapore market to become very saturated, but mobile has in fact given it a new lease on life and a new growth spurt.
It expects the same in the other South-East Asian markets it operates in as well. In Singapore, 45% of its traffic comes through a mobile device, and that figure is 30% for Malaysia and 25% for Indonesia, a number that is expected to pick up as smartphone prices come down.
“We think that next year in Singapore, mobile will overtake online traffic, and potentially by the end of next year, the same will happen in Malaysia,” says Melhuish. “Two years ago when we launched in Malaysia, it was only about 2% to 3%, so mobile adoption has been really, really fast.”
The Android platform has been growing the fastest, he adds, although the iOS platform – including both iPhones and iPads – currently has the biggest share.
“What we were really worried about two years ago was whether mobile would cannibalize normal online traffic, but what we’ve seen is that it extends the usage,” he says.
According to PropertyGuru’s analytics, in the ‘old days,’ there would be a peak at about 10 o’clock on Mondays mornings as people settled down at their offices to surf, and another at about 4pm as the working day wound down.
“Now, we’re also seeing a peak at 8am, presumably as people are going to work; and another at 10pm, presumably when they’re in front of their TV fiddling with their iPads,” he says. Mobile “has stretched the whole search process.”
The company has developed apps for the Apple and Android platforms which allow agents to take photographs and upload them to their listings and manage their enquiries, all on the go. It claims there have been 60,000 downloads for the apps across Malaysia. It also launched a consumer app about three months ago.
It also co-developed with Microsoft Corp a Windows 8 app, but the app was rejected by the Windows Store. “I don’t know what’s going on there, since it was developed with Microsoft, but we’ve tweaked and re-submitted it, and expect to see it go live this month,” says Melhuish.
He says the company has no immediate plans to develop an app for the Windows Phone 8 platform. “It’s really about user demand, so if we see a demand for it, we will work on it. It is why we have a Blackberry app for Indonesia.”
“It’s interesting because many agencies we speak to ask us questions about how to develop their websites and what they need to do to build up an online presence, but the world has moved on to mobile,” he adds.
Still, whatever market it operates in and whichever platforms it chooses to deliver its services through, the basic PropertyGuru principle remains the same, says Melhuish.
“It’s about us helping people understand the property market by publishing property news and research, in making the market more transparent by providing pictures and maps and transport links – those basic principles are the same.
“It’s about just taking the whole pain out of the property process by providing as much information as possible on the property market, on locations and on trends,” he adds.
He compares the online property world with that of traditional media, where one or three lines of text – with perhaps a grainy picture – doesn’t really give the buyer an idea of what he or she is getting into.
With online media, one can see where the property is actually located and how far it is from transport links and highways, check against the asking prices of similar properties elsewhere, compare properties, shortlist, or even create an alert so that when a particular property of the desired price range and preferred location becomes available, the user will be immediately notified.
“It just makes the whole process super, super simple,” says Melhuish.
“When you look at someone buying their first home, it’s their livelihood; it’s their entire life savings going into buying that property, so it can be a very painful and scary process if you don’t have access to the right kind of information.
“So that’s what we’re trying to do -- give control back to the home buyer,” he adds.
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