AGAINST the backdrop of Hong Kong's soaring property prices, the emergence of the China real estate market in the past two years provided buyers and speculators with an alternative market to make a quick buck. But as more people look north, property consultants and agents unanimously agree on one thing: marketing makes or breaks sales. In addition, the cooling of the Chinese property market following the introduction of control measures by the authorities has put doubts in buyers' minds, further underlining the importance of marketing. While the vast mainland market provides endless opportunities, it is also plagued with inconsistent information for customers. In a speech to the Hong Kong Institute of Marketing, C Y Leung and Co's managing director, Leung Chun-ying, summed up the sentiments of property agents who usually have the dual role of marketing and selling mainland properties. 'Of all the phases and all the efforts in a real estate development exercise, marketing is the most crucial in the mainland and also the most complex,' said Mr Leung. But he added existing methods were often not desirable. Developers for mainland properties tended to engage a firm of agents with little experience in marketing. 'And so we see page after page of pretty standard newspaper advertisements and pile after pile of colourful brochures all aiming to boost sales and letting, with little regard for the features of the project or the needs of the customers.' A director of Richard Ellis Land, Dominic Leung, said the move towards 'professional marketing' was inevitable as China's property market developed. He said it was positive to see initial resistance to the idea of project positioning in the market weakening. Despite the concept still not being well-received by locals, he said the development of marketing must forge ahead. 'Otherwise, the development of the real estate market will be unbalanced.' The abundant supply of properties has put pressure on sellers to market their products, and to market them well. Consultants say one fundamental is to identify the target market. However, experts also point out it is not easy to impress this on Chinese developers. David Cheung, of Vigers International Property Consultant, said the different mentalities between Hong Kong people or foreigners and the mainlanders was a contributory factor. 'Marketing methods that work in the territory need not necessarily apply well in the mainland. The mentality of the people there is different,' Mr Cheung said. 'Developers, unfortunately cannot differentiate between this.' A common example cited by experts was mainland buyers looked at locations to determine their purchases while the opportunistic Hong Kong investor was more concerned about the guaranteed investment return in the next two years. The overall result was unsuccessful marketing led to a shortfall in expected sales of any property development project. Mr Dominic Leung said superior marketing and packaging enhanced the image of inferior properties by as much as 20 per cent. Mr Cheung said developers needed to sell at least 50 per cent of unfinished residential or commercial flats in order to secure the continuity of the project. 'But in some projects, mainland developers don't even get back the basic costs. As a result, the projects became half sold and are put on hold indefinitely.' Take a Shanghai property project as an example. Good marketing can see unfinished units sell out in two weeks while inferior marketing leaves half-completed projects rotting away. Mr Leung Chun-ying said marketing of mainland projects was still in its infancy. Despite projects differing in use, size, design and locations, marketing personnel were often oblivious to this. A persistent fault property consultants were quick to point out was the failure to emphasise the individual characteristics of the projects and highlight their locations. Mr Leung Chun-ying said: 'For new and unfamiliar markets on the mainland, highlighting the location is a must.' He said the most difficult aspect of real estate marketing in China related to retail outlets, particularly the leasing of department store counters and shopping arcade units. 'In sale situations, few questions are asked by the vendor and the buyer and most of the sales are for speculative or investment purposes. When it comes to leasing part of a larger complex, the task must represent the ultimate test of real estate marketing expertise.' But Land Power's managing director, Michael Choi Ngai-min, said marketing tactics had evolved over the past two years. He said in the past there were no models of the properties put up for sale nor videos introducing the project. But the sudden deluge of projects had led to competition which resulted in more sophisticated marketing programmes. Mr Choi said a developer spent up to $200 million on marketing including advertising last year. Although the marketing budget slid by 60 to 70 per cent in the first half of this year as the market cooled, Mr Choi said developers were now increasing their budgets back to last year's level. Lastly, property consultants were realising the faster buildings emerged from the ground, the more likely they would have faults.
