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Heightened competition, lack of consumer stickiness and availability of fresh funding are driving consolidation in the online real estate segment.
While NewsCorp-backed PropTiger acquired People Group’s Makaan.com early this year, a number of other deals are in the offing, companies like Quikr, IndiaProperty, MagicBricks and Housing.com are on the prowl for acquiring other online real estate sites.
Most of these companies have received fresh funding that gives them room to grow through acquisitions.
Growing fastMagicBricks’ CEO Sudhir Pai said, “Despite the fact that the category is growing fast with several challenger brands, we will see the market consolidating. In property, revenue is a good indicator to demonstrate the leadership position. We don’t see that happening with lot of players.”
Though there is very little difference between the various real estate brands, at present, MagicBricks and 99acres.com together enjoy a whopping 75 per cent market share. About 10 players are fighting it for the remaining 25 per cent share by burning cash in advertising blitz and investing in technology.
Anupam Mittal, Founder of People Group, who recently sold some of his stakes in Makaan.com to PropTiger, said, “The new breed entrepreneurs are fighting together to the top rather than racing to the bottom. They would rather create value and hence are open to consolidation. Property will see more consolidation. Portals run by business houses and conglomerates will run independently but others will consolidate.”
He further added that acquisitions will be more of complementary in nature. For example
Makaan.com is primarily a listings site, while PropTiger is a transaction site that represents developers.
Key issueAccording to Rehan Yar Khan, founder of Orios Venture Partners, online property is a different ball game compared with other e-commerce verticals because it is very difficult to create a brand in real estate.
“We don’t wake up everyday thinking of any real estate portal. These are not products that we buy often, it is once or twice in a lifetime. We don’t need too many players in this segment,” he said.
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