BuyRentKenya is in the enviable position of being the largest local player in a country where relationships in business matter a lot.
Launched in 2012, BuyRentKenya’s key competitors include South African-based Property24, African specialist Lamudi.com.
BuyRentKenya Co-founder and CEO Jamie Pujara (Pictured left) is focused on the problem he originally set out to solve: how to make property search easier. In two to three years he wants his platform to be the clear winning player in Kenya with a presence in neighboring markets which he says will be about ready to enter.
The Kenyan market is a fascinating one, being essentially still at the incubation stage of development.
On the one hand, Pujara describes strong fundamentals, such as a strong buyer’s market, a growing population of 40 million plus, increasing urbanization and an expanding middle class with disposable income.
“However on the other hand, despite the huge demand and appetite for property online, the market structure and control systems are lacking,” he explains.
“We have many agents but not nearly enough professional agents or agencies. There are no restrictions, which means anyone can broker deals and negotiate commission with the seller, we have to invest a lot into education so that agents populate our platform with quality content and respond to leads appropriately.”
With the bulk of demand at the lowest spectrum of the property market, the hardest sector to monetize, revenue potential is also an issue.
“Therefore for portals to survive they will need to be focus on finding new revenue streams in the online space as the pay to list model will not sustain in the long run,” he says.
In addition the market is too crowded for the three key players to co-exist in the traditional property portal model. Pujara expects one to drop out.
“Lastly it will be about who can adapt their technology to match the needs of the advertiser and consumer understanding what information they want to know, how they want to know about it and the best way to communicate it to them,” Pujara says.
In terms of technology and functionality, Pujara says given the trends he sees and the diverse range visitors on the site, BuyRentKenya will need to focus more on consumer profiling to deliver more relevant results.
“We have to be more astute in how our consumers within the different demographics are consuming content and make sure the user experience is of great quality regardless of the platform being used,” he says.
From a macro level, Pujara says BuyRentKenya has a unique opportunity to help define the future in terms of the way people buy and rent property.
“It is important we are able to use our reach and position to bring some structure and formality to the market.
“I see us as being the authority, we need to create the brand where anything to do with property in should be linked back to us and our opinion should hold weight.”
But how will this be achieved?
“Our whole team including myself is Kenyan and so we have strong inherent relationships with the agents and agencies,” Jamie points out. “We know how to approach them and earn their respect and loyalty.
“We also understand the psyche of the consumer and what they want and how they want to be marketed to. Also because of our company structure we are able to take the feedback and adapt quicker than our competitors.
“By being local we believe we will always be able to adapt to the needs of the market and innovate solutions to better fix any problem.”
ONE OF THE LOCALS
Born and raised in Kenya, Jamie studied in the UK and after he graduated lived and worked in Tokyo and New York.
“I moved back to Nairobi in 2008 to help in the family business as my father had just been diagnosed with cancer,” he recalls.
“While I used the internet every day, at the time it did not occur to me at the time I would end up building a business around it.
‘In 2008 internet penetration in Kenya was fairly low and the numbers weren’t adding up. There was an existing portal at the time but they were perhaps too early and were not getting any traction.
However in 2008, he says, Kenya was a different place compared to the way it was in 1999.
“A new government had been elected in 2002, the economy was on the rise, the infrastructure was improving, private investors as well as international organizations were setting up offices in the city and there was a development boom in property,” he says.
“There was an emerging middle class that had disposable income and with the introduction of smartphones more and more people had access to the internet.”
PAIN POINT IN THE MARKET
Jamie says BuyRentKenya was started “purely by chance” but agrees he and Co-Founder Nicolas Adamjee clearly recognized the pain point in the market they could fill.
“There were two incidents that led to the start of BuyRentKenya,” Pujara relates.
“The first, was trying to find my own place, this was extremely painstaking and eventually I found the most productive results came from driving around town asking security guards and caretakers if there was any availability in the area.
“The second, was when Nico came to visit, he had just moved back to Mauritius from London to start up a real estate firm and asked if we had a property portal in Kenya. We talked about what we would need to set one up and eventually decided to give it a try.”
A few months after meeting Nico, James flew to Mauritius where the two hired a tech team to build the first iteration of Buyrentkenya which was launched in the last quarter of 2012.
Jamie says by the time he and Nicolas Adamjee launched BuyRentKenya, the elements for a successful property portal were in place.
“Connection speeds were better, internet penetration was over 60 per cent and the housing market, along with the middle class was still growing.”
In the beginning Pujara says the major challenge was to convince agencies to allocate some of their budget for online advertising.
“I think all online portals have had this problem,” he says. “Once we were able to show value at a fraction of the cost we were able to gain some momentum and managed to get the others to advertising their listings with us.
“Once we got them on board it was about making the content better. In a market where there are no exclusive contracts for agents, many advertisers avoid giving too many details in case a competitor or the buyer find out where it is and make a deal directly with the seller.
“To solve this, we invest in numerous agents’ workshops where we talk about best practices and inform them about how to use the platform more effectively.
“On the internal side, while it’s great to be in a country with relatively inexpensive labour we do have an HR struggle to find really good developers,” he adds. “We have had to outsource our platform twice and only recently were able to find strong local talent to help fill those roles.”
But the hard work has paid off.
BuyRentKenya has been named a CIO top 100 company twice and is the recent winner of the East African Real Estate Portal of the Year award.
“We were also named as one of 50 Kenyan Companies that will change the economy by the Kenya Daily News,” Pujara enthuses. “We also received investment from One Africa Media in 2014 and 2015 which owns a minority stake in our company.”
From the beginning, Pujara’s intention has always been to expand into other African countries with Uganda, Tanzania, Rwanda and Ethiopia first on the list.
“We feel we can draw enough similarities in how those countries operate when compared to Kenya,” he says. “As our neighbours, we understand them from a business, consumer and cultural perspective. Beyond the regional block, Nigeria is extremely interesting purely because on it’s size and potential.”
Overall Pujara is extremely bullish about Africa. Although he concedes in the current context there are still a lot of uncertainties.
“Africa is still a very underdeveloped continent which is, politically unstable and has rampant corruption,” he says.
“Many African countries are extremely difficult to business in and have a large consumer base that is unfamiliar with online businesses.
“If you look at individual African countries you will find the opportunity is not that big, especially for property portals which operate within a very specific economic demographic, which is why almost every business will hold aspirations to expand throughout the continent.”
MARKET WITH POTENTIAL
However according to McKinsey, Pujara points out, consumer spending in Africa will have risen from USD$860 billion in 2008 to USD$1.4 trillion in 2020.
“In eight of the last 10 years African Lion states have grown faster than the Asian Tigers and Africa as a whole will have a larger middle class than India by 2030,” he asserts.
“Owning your own home or land is something that resonates very strongly with Africans, in fact it’s one of the reasons so many conflicts have occurred.
“So if you combine this economic boom with massive development in housing and the innate desire to be a home owner then the future for property portals looks bright.”