Mainland China didn’t yet have a billionaire back in 2000 when Beijing entrepreneur Zuo Hui struck upon the then-novel idea of selling homes to individual buyers. It was a bold move, as the average GDP per capita was around $1,000 and a government policy that allowed private property ownership had been launched only two years earlier. “At the time, there weren’t many people buying their own homes,” says Zuo, 49.
Today, China is the world’s largest residential property market, as measured by gross transaction value (GTV). Despite the pandemic, total sales of both new and existing homes in China are forecast this year to be $3.5 trillion, up 3% from last year, according to research consultancy CIC in Hong Kong.
Zuo’s KE Holdings is sitting smack in the middle of many of those transactions. In the company’s lingo, it is China’s “leading integrated online and offline platform for housing transactions and services.” While the global real estate industry is often split into distinct silos—brokers, developers, contractors, listing sites—KE is close to a one-stop shop. It has a network of 42,000 sales offices, with over 450,000 agents across the country. Its Housing Dictionary is China’s largest site by listings of residential properties—with over 220 million in its database, including maps showing details such as the location of hospitals, schools and shopping. KE works with developers to launch and market their new projects. It offers contracting and renovation services. It even has virtual-reality technology to allow virtual property viewings, with 420 million views last year.
And it dominates its markets. KE, based in Beijing, is China’s largest housing transactions and services platform by GTV. Last year, KE’s GTV was $318 billion—up 85% from 2018. For the six months to June—covering the worst months of pandemic in China—its GTV hit $198 billion, up 49% year-on-year. Some pundits have dubbed KE the Alibaba of China’s residential property market.
However, the company, which operates only in the mainland market, remains unprofitable due to spending on rapid expansion. Last year, it lost $326 million on $6.9 billion in revenues. (To be sure, in the first half of this year, the company recorded a profit but that was also true in last year’s first half.)
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