The Agent's Mutual run OnTheMarket has been operating for just over 6 months and in that time we have seen a war of words between OnTheMarket and Zoopla. However, while this battle has been raging, Rightmove has gone from strength to strength and has just released record results showing revenues up 16%, operating profit up 18% and an all time high of agents and developers using their site. Is this the record result of good operational performance or has OnTheMarket inadvertently helped Rightmove and in the process, started the move from a duopoly to a monopoly?
Rightmove has been the market leader in UK for at least the last 15 years. For much of this time, they were the clear market leader with a highly fragmented competitor base. Between 2000 and 2008, Primelocation, Findaproperty, propertyfinder and a bunch of other smaller portals went head to head with each other and with Rightmove. In reality none made much of a dent in the market and Rightmove did pretty much as it liked.
In 2007, the Zoopla Property Group launched with the view of being the UK's Zillow but it rapidly transformed into a consolidation play in the UK. It acquired propertyfinder (for a bargain), prime location, findaproperty, globrix, and upmystreet to name a few. In this process, it created a true competitor for Rightmove and a duopoly in the UK market. It priced itself under the Rightmove price "umbrella", became profitable, and listed on the London Stock Exchange.
In 2015, OnTheMarket was launched with the view of breaking this duopoly. Firstly they wanted to target Zoopla to take the number 2 spot in the market and then challenge Rightmove for leadership (especially on price). To break the duopoly, they demanded that all "members" of OnTheMarket advertise on only one other portal - thus forcing their customers to choose between Rightmove and Zoopla. For most, the choice appears to have been simple - Rightmove - with Zoopla confirming in May that it had lost around a quarter of its customers.
However, the true outcome of the OnTheMarket strategy has been firstly to push agents more firmly to Rightmove and therefore strengthen the market leader and secondly, to create an all out battle with a very well funded Zoopla for second place.
Zoopla is not taking the battle with OnTheMarket lying down. Press release after press release can provide testimony to this. In addition, Zoopla continues to run a well funded marketing campaign that makes it hard for OnTheMarket to carve out a long term audience. Looking at the SimilarWeb numbers for June 2015, we see that on all dimensions, OnTheMarket has a long way to go to close the gap with Zoopla.
After 6 months, Zoopla (when compared to OnTheMarket) still has 9.2x the visits, 10.7x the total time on site and 11.9x the page views.
|Ave Time on Site (min)||7.8||6.7||10.0|
|Total Time on Site (min)||60,840,000||5,695,000||10.7x||160,533,333|
The bottom line is, OnTheMarket may have shot itself in the foot with its "only one other portal strategy" and in the process, made its customers (and members) - the agents - even more reliant on Rightmove than they were in the past.
Simon Baker is the founder of Property Portal Watch, the Chairman of the ASX listed Mitula, the former CEO/MD of the REA Group (previous owners of propertyfinder.co.uk) and the former Chairman of the iProperty Group.