"It's not as tied down as you find in developed markets" - Lazudi Co-founder & CEO, Costa Savva Talks Southeast Asian PropTech

September 20, 2022
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I recently published an article that looked at seven PropTech companies transforming the Southeast Asian real estate market.

Doing the research for the article, and for its sister article that looked at Latin America, was incredibly interesting but also didn't necessarily answer all the questions I had about the region's real estate market. There isn't a great deal of reliable information out there yet about Southeast Asia's PropTech startups.

I caught up with Costa Savva who is the co-founder and CEO of Lazudi, one of the companies featured in the article, to understand a bit more about Southeast Asia's property market.

One thing that struck me about Southeast Asia is that often it was hard to tell whether a company was a concierge service, a brokerage, or a portal. According to Savva, there might be a very good reason for this... everyone can get access to a lot of listings.

"The main issue that we face in these markets is that they're non-exclusive. So they're very buyer-driven. A lot of content online isn't accurate, multi-listed properties. Not all brokers and agents keep their inventory up to date."

"Brokerages have scaled up to the size where they're competing with the portals now which could be a bit of a sign of the times where consumers are looking for a bit more transparency and accuracy in the market."

When I put it to Costa that a brokerage site with almost as many listings as a portal might want to go it alone and market itself as a destination site (like Redfin in the U.S. for example), he wasn't so sure.

"I don't think the portals will lose their presence in the market there in terms of their scale and their audience... We can't underestimate their brands. Consumers have been viewing these tools and marketplaces for over a decade now."

 

On the pages of OnlineMarketplaces.com and at our Property Portal Watch events we are always hearing about real estate marketplace businesses 'getting into the transaction'. Southeast Asia is one of the regions where transactional models are thriving and Costa was clear about why Lazudi set up to get into property transactions rather than any kind of subscription model.

"I do think that it's kind of why people have gravitated there in terms of the amount of revenue you'd write on a subscription or a marketing package, versus the amount of property and commissions earned from those brokerages that are advertising on the portals.

"It's just the ticket size is a lot bigger when you're directly in the transaction. So you can really focus on creating the best user journey when you're in the transaction without having to kind of put in all these supplementary products and sell advertising positions and things to try to monetize. You can really drill down and focus on creating a very smooth and efficient process."

 

Despite issues around fake listings, Savva believes that technology is having a positive impact on transparency and efficiency in the region and that it is the tech-enabled brokerages such as Lazudi creating larger platforms that are leading the way.

"A lot of the feedback that we had from consumers in the early days was that they would share their property with multiple agents but never felt that there was any marketing activity or push behind it. It might just go onto a spreadsheet and get lost.

Some of the techniques that these brokerages are bringing to the table through automation and through creating these larger platforms that bring consumers to it get more eyeballs on to these properties and get more inquiries on a per listing level."

 

The Southeast Asian and Latin American PropTech landscapes might have a lot in common but one key difference is the amount of investment. Where Latin American PropTechs such as Quinto Andar and Loft have attracted billions of dollars with their innovative models, Southeast Asian PropTech has yet to take off in quite the same way.

Savva thinks that the key for the region's next generation of real estate marketplace businesses is being able to scale across borders.

"if you can take [your model] across borders and replicate that into more markets, I believe that's where the success is and where a lot of VCs are looking at. I do feel the tech seems a bit slow."

The pace of tech adoption and growth of the tech talent pool may be frustrating for some founders in the region but, as Savva pointed out, it is improving largely thanks to native companies.

"If you look at the resources, the talent pool that you've got here, it's only really over the last decade where it started to emerge. And that's off the back of big businesses like grab and PropertyGuru have done."

September 20, 2022
Edmund got to know the world of portals and marketplaces working at Mitula Group (which became Lifull Connect after the buyout in 2018). He worked directly with hundreds of portals across the world in his role in the content department for three and a half years before transferring to the SEO department to understand the inner workings of listings sites. He joined Online Marketplaces as Head of Content in March 2020.

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