Just over a year ago, casa.it was the clear market leader in Italy. However, on all dimensions the Italian property portal race has evened up with two players claiming market leadership – the REA Group / SkyItalia owned casa.it and the Real Web owned pair of sites, Immobiliare.it and Eurekasa.it. They both have a similar number of agents, listings, revenues, and visitors, and a similar belief that they are the market leader.
What is the true state of play in the Italian market, how did Immobiliare / Eurekasa challenge casa.it for the number one position, and what are the likely next moves from each of the players?
On the surface there are many property portals servicing the Italian market including Trova-casa, Prendicasa, Affito.it, casa24, idealista.it, tecnocasa, casaclick and so on. (It seems having the word casa in your name is pretty important!) However, cutting through the noise it is clear that there are really only two serious players, the REA Group / SkyItalia owned casa.it, and the Real Web owned sites, Immobiliare.it and Eurekasa.it.
The Nielsen Netview numbers for April reveal that Immobiliare.it is the most popular site in Italy with a 10% lead in unique visitors over second place casa.it. Immobiliare’s sister site, Eurekasa came in 4th place. Here are the top 10 from April.
casa.it appears to have around 11,000 agents using the site. Of these, approximately a 1/3rd is on a trial subscription and therefore not paying. (Source: REA Group FY 2009 half year statement) Immobiliare & Eurekasa appear to have around 9,000 agents, most of who are believed to be paying. (Source: Management Interview) The result is that casa.it probably has more listings with an estimated 400,000 compared to Immobiliare / Eurekasa’s estimated 350,000 listings.
The ARPA (average yield per agent) in Italy has traditionally been very low in the range of €30 - €50 per month. When compared to other European sites, both sites are generating below par revenues. Casa.it reported €3m in revenues for the first half of FY 2009 (July 08 – Dec 08) and therefore will probably deliver around €6m for the full financial year. It is estimated that Immobiliare / Eurekasa will probably generate around €5m in revenues for the same period. What is interesting is that while the REA Group reported a first half loss for casa.it of €2.8m, Immobiliare / Eurekasa claim to be profitable.
Given that there is a clear tight tussle for market leadership, how was it that Immobiliare / Eurekasa have been able to close the gap?
From an external perspective, there appear to be a number of factors at play. Some of these are:
The potential outlier here is the motivation of the REA Group. In recent months, it is clear that the REA Group is retreating back to its core Australian business. While in theory Italy is the next best market for them, it is unknown if they will have the appetite to continue to fund the Italian operations which, in the first half of FY 2009, had a significant increase in losses.
However, if either wants to create super profits (40%+ EBITDA margins) such as realestate.com.au in Australia, Seloger in France, or Rightmove in the UK, they are going to have to find a way to be significantly ahead of the other site – at least twice the size of most dimensions. This is unlikely to occur in the current situation so at some point both sides will have to look at merging or one party acquiring the other.
The next 18 – 24 months will be telling for the long term profitability of the industry and in particular these market leaders.