E-commerce companies and aggregators in the real estate space are struggling with their business and have yet to figure out ways to make enough money despite pumping millions of dollars into their business.
The HDFC Realty team is hoping their hybrid model combining on-line and off-line model that co-opts the broker will work in India.
“Instead of fighting with brokers. We will collaborate with them,” says Vikram Goel, CEO, HDFC Realty, an HDFC Limited company. HDCF Realty plans to scale up by tapping into the network of brokers across the country and using them to interface with buyers. Technology based with human interface is the only opportunity for the real estate industry in India, he says. So they will get brokers interested in their business model. HDFC Realty will be sharing with brokers around 70% to 80% of the brokerage and will only take a minor share, says Goel.
He sees this as a big driver for getting brokers on board. The company has already started working with around 2,500 brokers in the Mumbai and Pune markets. Initially the company plans to work with brokers it is comfortable with. There are close to 25,000 brokers with whom HDCF Realty’s parent firm HDFC is connected via home loan business, which it plans to leverage.
HDFC Realty has been in the real estate advisory business for the last 16 years but is turning a new leaf with a fresh approach to their business. It is Version 2 of HDFC Realty, says Goel.
“Everybody knows that digital has a role to play but pure technology will not work as there is very poor level of conversion on-line. All the talk in the Indian realty space has centred around valuations of these companies and doing away with brokers and not about what model will succeed here,” said Goel.
HDFC Realty has also ventured in the office space using some innovative ideas. All the big advisories focus on the needs of top clients in the top cities. HDFC Realty has also got into land deals and this will be more of a B2B business linking up developers and JV partners for developing properties.
“The focus on residential properties will continue as it is bread and butter business while commercial space will give profitability and land is a opportunity,” said Goel.