Tencent-backed real estate platform Beike announces ambitious growth plans amid legal row with rival

Can newcomer Beike dethrone Fang.com as China’s top online property portal?

The CEO of Chinese real estate online platform Beike, Peng Yongle, said on Tuesday that the firm aims to attract more than 100 million monthly active users in 2021, which would be a first for a Chinese property portal, 36kr reported Tuesday.

The company has shown explosive growth in the past. Beike was created in April 2018, after real estate brokerage Lianjia, which already had a dominant market share in large cities such as Beijing, rebranded its online business to connect property agents and property seekers countrywide.

A Chinese report shows that only four months after it went online, Beike’s monthly active users exceeded 8 million.

Peng, at a recent summit with the theme “new housing”, said this was possible because of Beike’s advanced digital capability and the fact that Beike has authentic data on a total of 187 million properties, such as location, area, and historical transaction information. He added that the number is set to reach 250 million in the next five years.

Beike’s bold announcement can be seen as a challenge to rival Fang.com.

An established property portal, Fang, which was formerly known as Soufun.com had some 115 million average monthly unique visitors, according to its 2017 annual report. The company, listed in the US since 2010, has yet to release its 2018 annual report.

Although both companies highlight different metrics, the much younger Beike appears set on surpassing Fang to claim that it is the number one in the online real estate sector.

As of December 2018, Beike said it had covered real estate information in 100 Chinese cities, connecting 170,000 brokers with individuals who would like to rent or buy an apartment in China or overseas.

By 2017, Fang said in its 2017 annual report that its website contained property contents covering more than 630 cities across China and overseas.

Unlike Beike with Lianjia, Fang have few offline presence, and Beike will further intrude in Fang’s core business, online property listings.

Real estate gold rush

This shift is playing out at a fast pace.

Take Xi’an, the capital of China’s Shaanxi province. Back in January, 2017, Beike did not exist and Lianjia had not opened a bricks-and-mortar store in the city. A lot of speculators outside the city rushed in to buy properties as prices were relatively low compared than in many other second-tier cities in the country. Many would have searched on Fang.com before showing up for making a deal and finishing the transaction.

Two years later, when owners are thinking of selling these properties for a return, the brokers who once helped them make a deal are now also on Beike, listing various property-related information on its platform. Several brokers told KrAsia that Beike had become a viable option, whereas Fang would have been the obvious choice to list properties in the past.

Beike is helped by the fact that Lianjia has been a household brand for at least a decade in China’s large cities where property prices skyrocketed. It mainly reached clients by its bricks-and-mortar stores before it went live its own website Lianjia.com in June 2014, later rebranding to Beike.

Lianjia once had a collaboration with Soufun.com, Fang.com’s predecessor, before it had its own online ambitions. But it terminated that deal over concerns that Soufum included misleading information.

The property sector in China is rife with tricks and attempts at fraud. It was not rare several years ago that a potential second-hand home buyer was told by a broker that the apartment he or she once saw listed online had been sold, only to be offered another one with a higher price tag.

Lianjia, with its offline presence, claimed that it only offered authentic information as its employees searched properties one by one before uploading relevant information.

Beike benefited from that trust Lianjia has built, but now, in its high growth phase, is also teaming with other large and small property brands.

And that might ultimately jeopardize Beike’s trust bonus.

Just when Beike celebrated its birthday with the “new housing” summit, another real estate online information portal, Anjuke, a branch of US-listed classified information portal 58.com, said that it’s suing Beike for allegedly “stealing information” including property photos. Anjuke is asking for a compensation of RMB 90 million (USD 13.4 million) from Beike.

The latter fought back, claiming it had also sued Anjuke for similar reasons, demanding compensation of RMB 100 million (USD 14.9 million).

Despite this tussle, Beike is set to be a major player in China’s highly competitive and cut-throat real estate market as it shifts online.

In March, the firm said that it has started its Series D round of fundraising, Tencent is already confirmed as a backer, with USD 800 million.

Beike is also one of the apps available on the WeChat Pay portal, along with only 11 other companies who have their service highlighted here, including the country’s largest ride-hailing firm Didi Chuxing, e-commerce sites JD.com, and Pinduoduo.

36Kr is the parent company of KrAsia.

Contact the writer at [email protected]

Editor: Nadine Freischlad