I have never been to Russia, the closest I ever came was standing on the harbourside in Helsinki in the late 80’s and seeing ferries depart for St Petersburg – at that time it was still called Leningrad! However speaking to Stephen Inscoe the other day certainly generated interest in visiting this amazing and dynamic country.
Stephen is the Founder and CEO of Idinaidi. Launched less than a year ago, Idinaidi is the first to offer a true national perspective from the start. The preparations pre-launch were extensive lasting more than two years and involved a team of 200 researchers in 38 cities analysing property prices, agent directory information as well as listings' source and structure, thereby establishing itself from the launch as a valued and credible platform for real estate agents and consumers, in what is expected to be a dynamic real estate market. A market that has in parallel with the overall economic growth seen strong growth since 1998 with hardly even a hesitation around the GFC.
As Stephen told me, "having worked in Russia for 15 years and lived there for the past 8 years: It is usually a big surprise for people to drive around Moscow, or the major cities, seeing the International brands that we all know, and seeing the number of shops, restaurants, new cars, and new projects. The one guarantee for newcomers to Russia is that they will be surprised by how different Russia is in reality, from what they expect. Russia is changing, it’s in some ways such a young country and yet, it has such history.”
To provide context; Russia is a country of over 140 million people spread across a vast continent stretching from Asia to Europe. It is the largest country in the world spanning nine time zones, with over 38 cities with a population of over 500,000 inhabitants, 13 cities over a million inhabitants and the capital city of Moscow at 12 million, placing it as the 16th most populated city in the world. In terms of connectedness Russia overtook Germany last year to become the largest European base of online population with 70 million with internet access with a forecast to pass 100 million by the end of 2015.
This defining structure of Russia speaks to why up until the launch of Idinaidi property portals for the country were primarily focused around the major cities of Moscow, St Petersburg and other large population bases, allowing this new portal to rightly claim to be the only truly national specialist property portal.
With over 240,000 listings and 4,000 registered real estate professionals and growing fast the site sees the potential to be hosting over a million listings within a year, which will represent the lion’s share of the market.
Real estate, unlike in most western countries is a relatively new phenomenon. It was really only in 1991 with the establishment of the Russian Federation that private property tentatively began; as previously the state control of property saw very little internal migration and house purchasing as a function of the state management of properties. However barely twenty years later and particularly since 1998 the situation has changed radically for real estate as with many other facets of Russian life.
The industry is not regulated, allowing real estate agents to set themselves up without extensive controls. There is a well-established Guild of Realtors, which with 20 years of standing does provide a body for representation of this young industry. Yet despite that there are a few existing brand franchises operating in the country.
As a dynamic economy there is extensive new property development underway and this provides a valuable business opportunity for Idinaidi to complement the existing property listings.
The business model for the company follows most other portals with a monthly subscription fee for real estate companies coupled with a per listing charge for private advertisers or individual agents. Added to this the company offers project pages for property developer as well as mortgage lead generation and traditional display advertising. The marketing for new property developments in Russia is considerable at this time with the majority of this investment by developers being in print and outdoor campaigns; it is estimated that currently only around 5% of marketing expenditure of the industry goes online creating a strong opportunity for Idinaidi. Premium property advertising is part of the plans moving forward as the industry embraces online.
Just as developing countries bypass copper telephone systems and go straight to mobile, so Idinaidi has capitalized on mobile and social media. Mobile already represents 30% of daily traffic and whilst the new dedicated apps are part of the next quarter development road map the site is well optimized for mobile usage.
In terms of social media the engagement stats of 4,650 on Facebook look good for a 1st year portal but you have to remember that Russia is one of those countries with their home grown online infrastructure. Facebook is not the #1 social media site, nor is Google the #1 search site. In terms of social engagement on the leading Russian site Vkontakte.ru (which bears an uncanny similarity to Facebook) Idinaidi is the #1 real estate site in terms of social engagement with over 23,000 followers, which certainly stacks up well with many of the leading global portals.
What are the challenges facing Idinaidi, I asked Stephen. Clearly they want to be the most comprehensive portal in terms of content and they are certainly well on the way there with 240,000 listings, with these listings will come the agents. A challenge though will be the professional presentation of property. When reviewing the content of the site as compared to some of the more developed markets there is a sense that the attention to detail in terms of say photography has a long way top go, however everything needs to be seen in context. Idinaidi is spearheading a change, a change that they are well placed to influence in the form of richer content; as ever there is only so much a portal can do to create a platform, it takes time, education and demonstration of value and return on investment to begin to change an industry, especially an industry which itself is only just beginning.
Idinaidi is backed by Sorren Media and Camco Private Equity Group.
I appreciate the time Stephen gave me in sharing the insights and understanding of the Russian market and Idinaidi. We are delighted that Stephen has agreed to be a speaker at the forthcoming PPW conference being held in Barcelona in November. In his presentation he will provide insight into the work undertaken prior to launch and how that has propelled the success of the site to date.