Kuaishou can’t create the second “Li Jiaqi in the real estate industry” by cutting shells

"There's not even a single person in that sales office. Do you think you'd dare to buy it?"

At 8 o'clock in the evening, in the Kuaishou live broadcast room, a handsome young man with a northeastern accent answered a fan's online question in the form of a rhetorical question.

His name is Wang Beile, and he used to be a real estate agent in Changchun. In 2019 and 2020, Wang Beile sold more than 1,000 houses per year through live broadcasts of real estate content on Kuaishou, with a cumulative transaction volume of about 2 billion yuan. He is now nicknamed "Li Jiaqi in the real estate industry" by the outside world.

Cheng Yixiao, the founder and CEO of Kuaishou, noticed him. In addition to asking the team to study the underlying logic of live streaming with real estate, he also went to Changchun to communicate with him. Wang Beile told Cheng Yixiao that before, when he was a real estate agent, he didn't dare to have dinner with clients. What if he lied to them, drank, and told the truth after drinking? Maybe they would fight. But now it is a state of trust. The anchor can have dinner with the home buyers, and the home buyers also know that this is the person who helps them solve problems.

Kuaishou’s interpretation of this is that live streaming makes transactions more transparent and builds a new type of buyer-seller relationship based on enhanced trust.

Wang Beile's success has opened up more possibilities for Kuaishou. In April this year, Kuaishou established a real estate business center and set a goal of "running the business model this year and breaking through the 10 billion yuan in total transaction volume." It also began to actively recruit partners, including city MCNs, real estate anchors, developers, etc.

Shortly after the media broke the news of Kuaishou’s establishment of a real estate business center, on May 11, Beike, which had been mired in layoffs and store closures, shorted by Muddy Waters, and included in the delisting risk list by the U.S. Securities and Exchange Commission in the past year, returned to Hong Kong for a second listing and is looking for new growth points in the home improvement market (see Snow Leopard Finance’s "Beike Finds a "New Home"" for details).

On the one hand, Kuaishou, a leading short video platform, is aggressively entering the real estate industry; on the other hand, Beike, "China's largest real estate transaction and service platform," is encountering a growth bottleneck and is urgently looking for a new year.

What is Kuaishou's ambition to enter the real estate transaction market and enter the Shell market? Can it get a share of the huge real estate market?

Wild Growth

Wang Beile is currently one of the most popular real estate anchors on Kuaishou. His 100,000 followers is not a lot, but in his live broadcast room, a house-viewing group of a hundred people can be gathered in two or three hours, and it is common for him to sell three or four houses.

In the traditional real estate brokerage industry, in normal years, a broker who can place one or two orders per month is considered a gold medal broker. The efficiency of live streaming of house sales is evident.

Unlike Li Jiaqi’s live broadcast where he shouts “Buy it, buy it”, Wang Beile’s live broadcast does not directly recommend properties. Instead, he talks about some real estate hotspots and home buying knowledge, answers users’ questions, and guides users to view houses.

"Why don't I recommend the most expensive house? I'm afraid my friends will scold me if I recommend it."

"I never say whether a house is good or not. I have never lived there, so how can I know whether it is good or not?"

“If I can’t solve problems from the fans’ perspective, then what’s the point of being a streamer?”

Before Wang Beile became a real estate anchor, he worked in offline real estate sales for more than ten years. In 2019, Wang Beile switched to online. At that time, live e-commerce was booming. With the help of live broadcast and his distinctive personal style, he quickly became one of the top real estate anchors on Kuaishou.

Wang Beile said that at first the real estate developers did not trust him, but later, because he had accumulated a large number of fans, took his fans to see houses and had a certain transaction volume, the real estate developers began to be willing to cooperate with him.

Wang Beile has two business models for selling houses: one is to be a direct agent of the real estate developer, and from time to time he organizes groups of fans to view houses offline, and Wang Beile obtains a certain commission from the signing of contracts; the other is to be an indirect agent of the real estate platform, such as obtaining scattered housing sources through Beike, etc. Wang Beile then takes customers to view houses and obtains corresponding rewards after the transaction is completed.

The Kuaishou official book "Trust Economy" published in April this year focuses on the "change in transaction relationships": live streaming makes the transaction process more transparent, and builds a new buyer-seller relationship based on the enhanced sense of trust. In the past, when selling houses offline, the agents tried their best to promote the properties to customers, and customers were wary of agents; now through live streaming, the anchor gathers fans through trust relationships - fans regard him as a professional "teacher" instead of just an agent.

According to data released by Kuaishou, the transaction rate of real estate anchors is more than 10 times higher than that of traditional sales models, which stems from the trust relationship formed between customers and real estate anchors.

Today, Wang Beile has trained a team of 50 real estate brokers. On Kuaishou, real estate anchors like Wang Beile are not uncommon: real estate anchors in the three northeastern provinces, Hebei, Shandong, Tianjin and other places also have good performance.

The "wild growth" of real estate anchors has made Kuaishou see the potential of real estate transactions and began to focus on real estate brokerage. However, can Kuaishou replicate Wang Beile's success on a larger scale?

"Planned" for a long time

The mini program of Kuaishou Real Estate Business Center is "Kuaishou Ideal Home". However, Xuebao Finance found that the location of this mini program on Kuaishou App is not prominent and needs to be searched to find it.

Entering the mini program, you can see that Ideal Home is only involved in new home transactions and has not yet involved second-hand housing sources. Among the 16 cities it is involved in, eight cities, including Tianjin, Cangzhou, Langfang, Shenyang, Dalian, Changchun, Harbin, and Linyi, have available housing sources.

When checking the real estate information, there are only the developer, property management company, price, delivery time, etc. Users cannot directly trade online, but must make an appointment first and then be led by the anchor to visit the house offline, and users can enjoy certain preferential prices. The cooperating real estate companies include Country Garden, Sunac, Greenland, etc.

At present, Kuaishou E-commerce is actively recruiting city MCNs, real estate anchors, and developers, and providing anchors with live house-buying privileges, traffic support, training services, etc., to help developers build momentum for their sales.

Although the house-selling mini program seems to be just getting started, there are already signs that Kuaishou is entering the real estate business.

In 2019, Kuaishou began to explore the model of "real estate anchors promoting new home transactions" (it was at this time that Wang Beile became a real estate anchor); in April 2020, Kuaishou and Fangduoduo jointly launched "live broadcast + selling houses"; in June of the same year, Kuaishou's affiliated company Beijing Dajia Internet Information Technology Co., Ltd. registered trademarks such as "Kuai Shuo Fang" and "Kuaishou Home Decoration". In October 2021, Chengdu Kuaigou Technology, a Kuaishou e-commerce affiliated company, added real estate brokerage business.

In May 2020, after Kuaishou’s structural reorganization, “transformation towards industrialization” was identified as one of its key future strategies, which also included the layout of real estate business.

At the same time, Kuaishou uses live broadcasts and short videos to incubate real estate anchors and accumulate resources for exploring the "live broadcast + selling houses" business. According to public data, in 2020, Kuaishou's total number of real estate live broadcasts reached 7.3 million, and the cumulative video playback volume increased by 37% year-on-year.

Kuaishou’s entry into the market is closely related to the industry characteristics and market changes in the real estate market.

Even though the real estate industry has been in a downturn in recent years, the real estate transaction market is still a huge pie. The leading enterprise Beike, which has just been listed for the second time, only occupies about 10% of the real estate brokerage market, and there are a large number of third- and fourth-tier cities that are not covered - these are the blank markets that Kuaishou is eyeing.

On the other hand, due to the impact of the epidemic, offline real estate transaction activity has dropped significantly, real estate developers have accumulated inventory, and the supply and demand relationship has changed. Real estate brokerage businesses have shifted to online, and sales model innovation is urgently needed. However, the expansion bottleneck of store outlets and the decline in the number of brokers have put Shell under great pressure.

The huge Chinese real estate market cannot be swallowed by one or two Shells. If Kuaishou can establish a deeper connection and trust between the supply and demand sides through traffic and anchors, it is not impossible to become a new force to leverage market growth.

But the problem is that real estate is a typical non-standard product. It is not only expensive, but also has huge differences in region, usage, price, and even public management. Only a small number of consumers are willing to promote transactions through online channels, and it is difficult to achieve the "traffic + user fission" effect of other retail consumer products.

The emergence of top anchors is the result of the superposition of various factors, and it is difficult for Kuaishou to mass-produce Wang Beile.

Real estate does not believe in traffic

During the just-concluded May Day holiday, Kuaishou’s house sales volume was not optimistic.

According to data released by Kuaishou, in an online home buying event initiated by Kuaishou Ideal Home and real estate vertical anchors in Cangzhou, Shenyang and Tianjin, 40 new homes were sold in 5 days, with a total transaction amount of approximately 35 million yuan.

Compared with other commodities, real estate is a low-frequency, high-value consumption product, and it is not realistic to sell it on a large scale solely through online live streaming.

Selling houses through live streaming, how are those people and companies who were the first to try it out now?

In 2020, the epidemic caused offline house sales to cool down, and live streaming quickly brought the house selling business to the forefront. A number of big V anchors and celebrities such as Wei Ya, Liu Tao, Gao Xiaosong, and Tong Dawei took turns to start live shows to support real estate companies and Internet giants to sell houses. The most popular scene was when Wei Ya, the former "live streaming queen", sold 10 apartments in Hangzhou in 40 hours.

But good times don’t last forever, and in 2021, live streaming of house sales is no longer possible.

Other real estate intermediary platforms followed suit and livestreamed their sales. Also in 2020, Beike used VR technology to launch theme events such as "Good Houses on Beike Livestream". Fangtianxia and Anjuke have also conducted similar livestreaming businesses. However, compared with livestreaming by big Vs and celebrities, it did not create much of a stir.

Traffic is not everything, especially in the real estate sector. Most of the Internet giants that have flocked to the real estate business have had a bad start.

After several twists and turns, Alibaba's "Tmall Good House" was sold to Easyhome; JD.com's real estate division once declared the goal of "creating the double champion of traffic and transaction volume within 5 years" in 2017, but there has been no waves in the past few years; one of Kuaishou's rivals, ByteDance, incubated the real estate information platform "Xingfuli" in 2018, which was split at the end of last year.

Snow Leopard Finance believes that Kuaishou’s house selling business currently faces the triple challenges of timing, location, and people.

Time: Under the policy tone and market environment of "housing for living, not for speculation", the entire industry has not really recovered. In 2021, China's real estate market opened high and ended low. According to data from the National Bureau of Statistics, the national real estate transaction volume exceeded 18 trillion yuan in 2021, an increase of only 4.8%. In particular, mortgage loans were tightened in the second half of the year, and transaction volume fell for six consecutive months. It is expected that the overall market will still operate at a low level in 2022.

Geographical advantage: Kuaishou’s main focus on the third- and fourth-tier sinking markets has avoided direct competition with Beike, but these areas themselves have inactive real estate transactions and insufficient rigid demand, and traffic cannot create demand out of thin air. According to statistics from CRIC (China Real Estate Information Group), the transaction volume in third- and fourth-tier cities across the country fell across the board in 2021, with a cumulative year-on-year decline of 6% in the first 11 months. Changchun, where Wang Beile is located, has also seen some housing price declines.

Renhe: Competition among live streaming peers, the Internet transformation of traditional real estate agencies, and real estate developers directly entering the online business to grab the cake have become increasingly fierce. For example, in the past two years, real estate companies have also launched a live broadcast war, with live broadcasts of home purchase group purchases, new product live broadcasts, and content marketing in the form of live broadcasts by in-house experts. Houses are becoming more and more difficult to sell, and how much of the pie Kuaishou can get in this market remains uncertain.

At Vanke's 2022 Annual Meeting, Vanke Chairman Yu Liang judged that the real estate industry has entered a black iron age of shrinking scale and de-financialization, and that people must tighten their belts, live a hard life, and earn hard-earned money: "Either you die or you live, there is no middle ground."

Can Kuaishou achieve alchemy in the "black iron" when selling houses?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.