JD.com follows Alibaba into China’s property market with dedicated online channel
E-commerce giants’ entry into industry, considered a key pillar of the Chinese economy, viewed as lending it greater transparency
China’s property market has become the latest battlefield for its top two e-commerce titans, as JD.com follows Alibaba Group’s foray into online property. It aims to leverage technology and an understanding of consumers to not only change the way homes are sold and rented out, but even how they are designed and constructed.
Beijing-based e-retailer JD.com on Tuesday launched a dedicated online channel for real estate businesses, pledging to use an “innovative” way to better connect property developers and potential buyers and tenants in China, where the central government has reinforced efforts to stabilise housing prices and bolster the rental market.
JD.com’s entry comes about two months after Alibaba, which owns the South China Morning Post, made its foray into the online housing market. Alibaba, which already sells property online, uses technologies such as facial recognition and online credit analysis to offer tenants an easy way to rent flats without the risk of fraud.
Lu Zhenwang, chief executive at the Shanghai-based Wanqing Consultancy, said entry into China’s property industry – one of the key pillars of the world’s second-largest economy – is expected to give the online finance businesses of both e-commerce giants a significant boost.
“With the sky-high property prices in mega cities in China, imagine how much money people will need to borrow to buy a flat or lease one,” he said.
Connecting property developers and consumers is only part of JD.com’s plan. The company said it will also use technology such as big data and its insights about the Chinese middle-class consumer to help the operations of property developers, such as inventory management, and even help them design property products that are more tailored to the demands of consumers.
Joe Zhou, the head of research at real estate services company JLL China, said the individual sale and leasing market was just an “entry point” – the e-commerce giants’ bigger ambition for the industry lies in the much bigger enterprise-level market.
Zhou said Alibaba and JD.com would apply technologies such as big data, internet of things, automation and smart software-management systems – or “proptech” – to office, mall and industrial properties.
“They will not deploy much offline resources to replace agents such as us, but will build a platform that connects sellers and buyers.
“The largest barrier to the development of China’s property market is its opaqueness. Many traditional agents take advantage of this to make money, rather than to improve services,” Zhou said.
“What these internet giants are doing is breaking this monopoly of information and radically improving transparency [in the industry].”