Bricks and Mortar

Sex shop owner's insights stimulate debate among China's developers

Wake up call from sex shop owner has mainland property developers worried about the future

PUBLISHED : Monday, 24 February, 2014, 11:48am
UPDATED : Wednesday, 26 February, 2014, 12:18pm

Ma Jiajia has suddenly become a famous - albeit controversial - figure in the mainland property market.

Born in the 1990s, she is the chief executive of a company that runs sex shops.

Ma was recently invited by China Vanke, the country's biggest home builder by sales revenue, to deliver a two-hour talk in which she claimed that her generation does not buy homes.

If that is true, what will become of the mainland's housing market, with prices now at record highs and far beyond the reach of middle-income families?

That outlook obviously frightened some developers, who called her "an alien".

But others embraced the challenges Ma threw down: developers need to try out different sales and marketing strategies that cater to a generation whose life is becoming increasingly redefined by the internet and the technology revolution.

The possibility of a game changer … is playing on the nerves of mainland developers

Ma's talk generated a shock wave that is still rippling through the frothy real estate industry, and it became the centre of a debate that has already been going on for a while - how the internet and new technology, tearing down the boundaries of traditional industries, will reshape China's property market.

The mainland's leading smartphone messaging app, WeChat, owned by internet giant Tencent, has shaken China's oligopoly telecommunications operators, as more and more clients dump their traditional voice and message services.

China's bureaucratic banks are also experiencing an onslaught by e-finance platforms, such as Yu E Bao, launched by e-commerce giant Alibaba, that are mushrooming and attracting billions of yuan in deposits.

Alibaba chairman Jack Ma Yun pledged in November that he wanted to use his e-commerce platform to bring down the mainland's property prices. has become a serious rival to traditional retailers and shopping mall operators.

The possibility of a game changer, jumping out of nowhere, is playing on the nerves of mainland developers, adding to their anxieties over an economy where growth is slowing but land prices are surging.

All these issues are forcing mainland developers to think about how they can survive, and expand, in the coming decade. Some have tried to sell their projects online, including Soho China, but these efforts have not been very successful so far.

On the technology front, Vanke is trying to be a pioneer among the developers but has yet to announce any revolutionary strategies.

Chief executive Yu Liang has been leading his team on visits to technology companies such as Tencent and Alibaba. "We visited Alibaba and Tencent not to learn how to use the internet. We do not need new tools; we need new ideas," he said.