Fang.com Chairman and CEO Vincent Mo told SouFun Holdings Limited investors the Chinese online property business plans to expand by building on a number of key initiatives.
Mo was speaking following the release of SouFun's financial results for the fourth quarter, which saw Fang.com increase its revenue by 35 per cent to $300.7 million.
The increase in revenue for the quarter was primarily driven by the growth in e-commerce services, which increased by 76 per cent year-on-year to $173.8 million.
Mo says in 2016 Fang will continue to deepen its transformation especially in the retail market.
“Conservatively, I think we are going to add from 10,000 to 20,000 people by the end of this year,” he says.
“We added about 30,000 people last year, so we have grown from just over 10,000 to over 40,000 people now, which resulted our increased market share.”
While Fang’s e-commerce business is currently driving the majority of the company’s growth, Mo says Fang continues to strategise for growth from secondary and primary direct sales including its home decoration service.
“In 2016 I think our key growth driver will be the new e-commerce business, but at the same time our marketing, testing and financial services will remain stable,” Mo says.
“Having added a value chain for transactions, our financial services have developed pretty quickly in the past couple of quarters. That’s one of the reasons we’ve adopted a transaction model."
Mo says value added services Fang will now offer include property valuation and financial services for resale and new home transactions.
While he admits the adoption rate for online property services in the Chinese market is still low he says the company aims to utilise its existing incentive plan for resale agents to provide leads and match contractors with property buyers and sellers.
“I think as volumes increase, our financial services will help facilitate transactions, so the incentive plan will definitely be useful and necessary for both the transaction people and the financial people to work together harmoniously.”
Fang reported a guidance of 20 per cent to around $1,060.2 million which Mo says is conservative at this point in time.
“Every day we have over 5 million unique visitors, so (further growth) depends on how much we can transfer to transactions,” Mo says.
“Even if we can convert one per cent of our traffic into real transactions, that’s enough. Every day we think about that. We don’t really need much of a hike in volume rate.”
In terms of transaction profits Mo says Fang needs to “do something similar to what the banks are doing”.
“We need to set up accounts for the buyers and sellers,” he clarifies.
“Buyers and sellers will deliver profits through their accounts via our transaction platforms.
“That is going to be a reliable strategy for us and it will help make us more transparent, which will increase efficiency.”
Mo also admits his people are still comparatively new to the online property business space but expects them to quickly become expert sellers as they increase their knowledge and experience.
“I think we can reach our goal of three transactions per agent into the future, but I don’t know how long it will take,” Mo says.
“We’ll try very hard to make sure we can get there as fast as we can.”