Spacious CEO and Founder Asif Ghafoor told last week’s Property Portal Watch Conference in Bangkok how he built a startup in the greater Chinese market with a robust tech capability to meet tough challenges
Based in Hong Kong, Spacious focuses on the greater Chinese market including Taiwan and Shanghai. CEO and Founder Asif Ghafoor says this year the company plans to also open in Shenzhen and Beijing.
“After that we’ll look at the rest of the northern region where we see the best opportunities,” he told about 130 delegates at last week’s Property Portal Conference in Bangkok.
Ghafoor, originally from London, got the idea for his business when his company Goldman Sachs relocated him to Hong Kong in 2007.
The former IT director found it extremely hard to find a place to live. He says there were a lot of competitor portals in the market, but they hadn’t kept up with global trends in terms of property portal technology.
“Data was a real issue, and despite China being touted as a mobile first environment, mobile capability was really lacking in Hong Kong,” Ghafoor told the conference.
“Hong Kong and Taiwan are peripheral markets ignored by the main Chinese players and the international market perceives the markets as small despite the high values of real estate really in the region.
“Our average sale price is $US 1.5 million and affordability is a real issue with Hong Kong rated the least affordable city in the world,” he points out.
Founded late 2013 Ghafoor built the initial platform for Spacious which quickly gained traction and enabled the team to raise half a million US dollars in its first capital round in 2014.
“We built a presence in the Hong Kong market which then allowed us to raise $US3 which we’re using to expand into Taiwan, Shanghai and of course expand further in Hong Kong where the bulk of our team is based.”
But the success of Spacious did not come easily. In a market without Google and Facebook to support SEO, little to no market transparency around data and an inherently unstable, unreliable internet service, Ghafoor had his work cut out for him.
Ghafoor points to the following key challenges:
He says in response to the challenges he followed through with three key areas of focus:
“We try to answer the questions that people care about when they’re looking for a place to live,” Ghafoor says. “We try to encourage people to use our data rather than rely on agents.”
Ghafoor says this approach does not mean the platform sees itself replacing agents, but aims to promote the better agents to improve the transparency of the service.
“We identify the agents that delivered a very good experience and tell these agent we’re going to promote them for free. It’s a very good incentive for them to behave better and it works well for us.”
“We also try to show users what can happen if they purchase a property in terms of rental yield and price appreciation.”
“We came up with some useful metrics and analytics which helps users make better decisions,” Ghafoor says.
“We have four or five product releases every month as a way to always stay ahead of the market.”
Though it has both web and mobile apps, Spacious concentrates on a business to business mobile to mobile app experience.
“We try to capture the interaction within our own platform between buyers and sellers so we can use the data to promote better agents.
“We’ve also spent time cleaning our listings data so we can intelligently identify fake listings. We tell agents we have a criteria, so it they fall into the fake listings bucket their listings will be taken down automatically.”
“For example they can understand the demographic of a neighbourhood and even drill down to the way people voted in an area.”
Spacious uses basic artificial intelligence (AI) in tandem with its pricing and valuation methodology.
“We try to predict rental yield for a specific property, for example,” Ghafoor explains, “it's something our users find very useful.
“In addition we present information on whether we think a property is over or under valued to add colour to the market.”
Spacious has also undertaken an analysis of search trends on the site and how these have changed over time.
“The data provided a very useful picture of what that meant for certain neighbourhoods,” Ghafoor says. "Hong Kong Island saw a reduction in search volumes overall but certain other areas showed an increase.
“When we compared the figures in the following 3-4 months there was a relationship which we found very exciting.
“The search trends on our site lead to changes in prices. We build our infrastructure to do this from the beginning and we want to do more to expose this kind of information."
Marketing and haunted houses
Ghafoor says marketing is still “gravitating online” and hasn’t been as quick to mature as in other parts of the world.
“In China the portal market has been dominated by primary developers and we’re now only seeing a rise in the secondary market,” Ghafoor clarifies.
“The government is only now just thinking about zoning. A lot of the real estate is still distributed through large agencies.”
However, he is proud of the media attention Spacious has achieved.
“We’ve been featured on the Apple App store three times in Hong Kong, Macau and Taiwan,” he enthuses.
Spacious also analysed the correlation between prices and haunted houses which was picked up by media around the world.
“Haunted houses are no joke in China,” Ghafoor says.
“It’s one of the parameters Chinese people really care about; whether houses might have a history with an incident. We were exposing a data set no one had seen before.
“China has a billion people and a trend of urbanization,” he adds.
“So even though there are some big players there are so many niche segments and opportunities. As a result, it’s viable for Spacious to be dominant in just some of those segments.”