Challenger Spotlight: We Analyse 5 Portals' Chances of Catching Market Leaders

Beating a market leader in the 'winner takes most' world of portals is tough. Those network effects that those silicon valley VCs love to talk about are at their strongest when it comes to real estate marketplace sites.

For many, market leadership is a tiny spec in the distance but for other challengers, it's a realistic goal. We take a look at 5 case studies from around the world and assess their chances of catching up to the established market leaders in their countries.

1. Inmuebles24 - Mexico

The real estate landscape in Mexico is an interesting one. For a long time, the brand name of reference in the country was eBay Classifieds-owned Vivanuncios but in recent years Navent owned Inmuebles24 has been making a strong push for the #1 spot and may well have taken it already.

Arguably the two are now neck and neck with Vivanuncios still slightly ahead on branded keyword searches on Google and Inmuebles24 slightly ahead on traffic and engagement over the last 6 months according to Similarweb:

For a long time, Vianuncios was a powerhouse brand in both its real estate and autos verticals. Over the years however the autos vertical declined significantly and nowadays listing numbers have dwindled to just over 3,000. New owner Adevinta will be hoping that Vivanuncios' real estate vertical doesn't go the same way.

There is speculation that Vivanuncios could be the next brand on the chopping block following the likes of Fincaraíz and Tayara as the case for new owner Adevinta to sell off its non-European assets grows stronger.

Online Marketplaces assessment: Looks like this one may have already happened. In any case, Latin American classifieds operator Navent looks well placed to consolidate the top spot in the increasingly lucrative Mexican market with Inmuebles24.

2. Zoopla - UK

"The sky will fall on our heads tomorrow" -  Much like the perpetual lament of a comic book character, plenty of commentators have speculated that the downfall of Rightmove could be just around the corner. Each time the British portal juggernaut ignores the noise and just keeps on delivering record numbers for its shareholders.

That said, agent numbers may slowly be levelling out with arch-rival Zoopla boasting of agency numbers of over 19,500 in April and Rightmove's latest shareholder report striking a positive tone on all metrics apart from this one (numbers were down to 19,111 in the FY2021 HY1 report released last month).

Click the maximise icon on the bottom right to open our Data-Studio report on UK portal agent numbers

Looking at other possible reasons for the sky falling, there has been a big decrease in UK property sales in July after the end of the pandemic-triggered stamp duty holiday. Rumblings from the native industry press are that the focus will now shift back to the value that portals deliver. Rightmove, as an incumbent leader that looks to increase ARPA every year, has the most to lose from any shift in market dynamics which might leave its customers under pressure.

Although Silverlake-owned Zoopla's lack of publicly available detailed financials makes any proper comparison difficult and Rightmove should never be written off, the UK portal scene remains one of the most interesting in the world and the profits available for the winner means there will always be massive competition.

Online Marketplaces assessment: Very unlikely. Although the majority of agents seem to really dislike Rightmove, they remain too dependent on it and too divided to do anything about it.

3. PropertyGuru - Malaysia

When we analysed the top property portals in Southeast Asia for an infographic series last year we found that iProperty came out on top in terms of both traffic on Similarweb and branded queries on Google. This was controversial and we received some angry emails.

We didn't realise that we had stepped on a landmine in an intense (and tedious) PR war centred around which site was the top real estate dog in Malaysia that went on until the landmark deal which saw PropertyGuru buyout iProperty was announced at the end of May.

If we look at the relative strength of the two brands, measured by how often users Google the two brand names, we can see that iProperty still has an advantage over its ex-rival.

In terms of financials, iProperty regularly contributed negative numbers to REA Group's reporting and before being sold off was responsible (together with the group's other Asian assets) for a 16% decline in year-on-year revenue for the segment in FY21.

A lot of the fundamentals behind the recent numbers can be chalked up to the adverse effects of Covid-19 related lockdowns in the country. Yet the comments made by PropertyGuru CEO Hari V. Krishnan who said that he and his executive committee "had a feeling that [their] competitors in the space are going to struggle" probably points to something more than pandemic difficulties. It certainly doesn't point to a company being the target of an acquisition because of its operational excellence or its exemplary balance sheet.

Online Marketplaces assessment: Now that PropertyGuru has a near-monopoly in Malaysia it probably doesn't make sense for them to allocate a lot of resources towards the iProperty brand. PropertyGuru and its associated brands are on top in most of the other regional markets that they operate in and there is no reason to believe that their flagship brand won't eventually overhaul the brand they have acquired for purely consolidatory purposes. It's all academic now that they're under the same ownership anyway.

4. Realtor.com - USA

It might not need to be said, but Zillow is huge. Huge in terms of its measurable numbers and huge in terms of its immeasurable brand power. When we looked at how much revenue property portals make from each housing transaction in the market, Zillow was not near the top but it was considerably ahead of its closest rival - Realtor.com.

For a long time, Realtor.com was a non-competitor, a #2 portal being lapped by the market leader. But after a few clever appointments and some fresh impetus in recent years, the NAR backed portal has generated plenty of positive headlines and has been looking to cut its Zillow deficit. Let's consider some of the factors that might work in its favour going forward:

• Portal analyst Mike DelPrete has shown that the revenue gap between market-leading Zillow and Realtor.com has closed slightly recently. Although within the bounds of fluctuations, it may not be a temporary blip.
• There has been speculation by the likes of US market commentator Brad Inman that News Corp may be putting Realtor.com in the shop window. Any new owner would likely not be short on cash and would no doubt want to take on Zillow.
• Consider the possible bite that CoStar is looking to take out of Zillow in residential with the imminent launch of its own portal. CoStar's CEO Andy Florance has bad-mouthed Zillow several times over the last year or so and has them, rather than Realtor.com, in his sights.
• The FTC is increasingly looking at big companies like Zillow through a different, more aggressive lens. The ShowingTime acquisition is already under threat of being kiboshed and should that happen, Zillow's route to growth through M&A (which the company has turned to frequently over the years) would be under serious threat.

Online Marketplaces assessment: Very unlikely to be overtaken in the foreseeable future. Zillow is not only a household name at this point but almost in the 'Airbnb' territory of becoming a verb as well. That doesn't mean that Realtor.com won't continue to shorten the gap though.

5. Aqarmap - Egypt

We end this roundup with a mystery. The Middle East and North Africa is a region that is notoriously data-shy.

None of the portal operating companies are publicly traded, they tend not to show listing or agent numbers on their websites and they guard their secrets well. Google trends data for non-English speaking countries tends to be patchy and unreliable and neither PropertyFinder nor Aqarmap have raised funds for the last three years (at least not publicly anyway), so we don't even have an accurate valuation clue to go off.

While Dubai-headquartered PropertyFinder operates in 6 countries and claims to be #1 in Egypt (curiously on its SEO title tags displayed on Google search results and not directly in the text on the website itself), Cairo based Aqarmap operates in only 2 markets (its native Egypt and Saudi Arabia) and makes no such visible claims.

What we can say is that according to Similarweb, the two portal companies are very close when it comes to Egyptian traffic with Aqarmap reaching about 85% of PropertyFinder's visitor levels over the last 6 months:

An even more tenuous metric we can use to judge these two is employee numbers from Linkedin. Here the figures suggest (and it really is just a suggestion) that Aqarmap as a company is dedicating a lot more human resources to its Egyptian market.

Online Marketplaces assessment: Difficult to tell here - a perfect example of why we appreciate companies that share their data. Since EMPG's deal to consolidate Bayut and Dubizzle last year closed off its route to the #1 spot in the UAE, we may see PropertyFinder double down on markets like Egypt and look to create a significant gap between itself and Aqarmap.

Have we missed any interesting markets from this analysis? If you've got a good case study with some nice data to show us, get in touch. We might make this a regular feature...