News and Research on E-House (China) Holdings Limited (EJ)
Business Description
E-House (China) Holdings Limited operates as a real estate services company in China. The company provides primary real estate agency services, secondary real estate brokerage services, as well as real estate consulting and information services.
The company operates through a network of real estate sales professionals in 20 cities throughout China. The company’s service offerings includes its proprietary real estate information database and analysis system, which the company refers to as China Real Estate Information Circle system, or CRIC system, which provides up-to-date, comprehensive and in-depth information covering residential and commercial real estate properties in various regions in China. The company’s clients include domestic and international real estate developers.
Services
The company provides three principal types of services: primary real estate agency services, secondary real estate brokerage services, and real estate consulting and information services.
Primary Real Estate Agency Services
The company’s principal business is providing primary real estate agency services to real estate developers of mainly residential properties. Its contracts specify the sales period, the minimum average sales price and the sales commissions. The company develops a signature identity and brand that are distinctive to a project. It assembles profiles of typical buyers and select public relations and advertising companies to design the marketing materials and marketing venues based on the profiles.
The company’s proprietary sales monitoring system allows prospective buyers to view inventories of unsold units on a real-time basis and enables its sales staff and developers to closely monitor the status of the units at various stages of sales. The company’s developers may adjust their strategies for the sales of the unsold units as well as the construction, marketing and sale of the units to be built based on the buyer feedback information recorded in its system.
The company also generates sales by contacting targeted customers with information on selected projects. The company has a nationwide ‘E-House Membership Club’ with approximately 250,000 members as of March 31, 2007. It also contacts potential customers in its customer databases based on the customer profiles and preferences.
Secondary real estate brokerage services
The company provides secondary real property brokerage services. The listing and brokerage services include both sales and rentals. It focuses its secondary real estate brokerage services in three metropolitan areas with in China: Shanghai, Wuhan and Hangzhou. The company also provides secondary real estate brokerage services in Hong Kong and Macau. As of March 31, 2007, the company had 75 stores in Shanghai, 17 stores in Wuhan, 16 stores in Hangzhou, 4 stores in Hong Kong and 2 stores in Macau. In 2006, the company facilitated 921 secondary real estate sales transactions and 1,381 secondary properties rental transactions.
The company’s secondary real estate brokerage services include offering advisory services on choices of properties, accompanying potential buyers on house viewing trips, drafting purchase contracts, negotiating price and other terms, providing preliminary proof of title, coordinating with the notary, the bank and the title transfer agency. The company also provides market information to both buyers and sellers based on its research capabilities supported by its proprietary CRIC system and the research staff at the E-House Research and Training Institute. In addition to marketing and selling properties in the secondary real estate market, its brokerage storefronts also support its sales effort in the primary real estate agency services market primarily by promoting and selling any remaining unsold units of primary real estate projects.
The company provides its secondary real estate brokerage services using a lease-and-operate model. The company directly lease properties for its brokerage storefronts, manage and train the sales staff and maintain all the applicable licenses. To serve the expatriate communities in Shanghai and other major cities in China, the company employs sales personnel with English, Japanese and Korean language abilities.
The company, in Shanghai, classifies its storefronts into three types. Class A stores are its flagship stores. These stores are centrally located in commercial centers to attract potential buyers and sellers. Class B stores are located near metro stations and other transportation nexus points. These stores provide access to its sales staff. Class C stores are located inside, or immediately outside, housing compounds. These stores serve as a collection point for sales information concerning the units in that particular compound and enable the company to respond to potential sales leads. As of March 31, 2007, the company had 10 Class A stores, 17 Class B stores and 48 Class C stores.
Real estate consulting and information services
The company provides real estate consulting and information services modified to meet the needs of developer clients at various stages of the project development and sales process and other clients with particular requests and needs.
Real Estate Consulting Services
The company divides its consulting services into land acquisition consulting and property development consulting — which occur in the early stages of a real estate development project — and other consulting, which can range from banks and investors to government and non-profit organizations.
Land Acquisition Consulting: The company provides developers with development potential and risk analysis reports of the properties under consideration, including information such as comparable real estate transaction histories, potential target market for the development project or projected price. The company also provides consultancy services to land owners and land brokers to market the land to developers and introduce developers to land owners or land brokers.
Property Development Consulting: The company offers various services to developers who have acquired the right to develop a piece of land. The company provides project feasibility studies which include general information on market conditions and trends and information concerning the demographics and the existing and projected amenities in the area where the project would be located. The company also provides a comprehensive analysis of the real estate transaction history of nearby development projects, including average sales price and sales activities, marketing and advertising campaigns employed, amenities and services offered and demographics targeted by these projects. The company works with developers to define the targeted demographic and determine the optimal unit size, price schedule, interior and landscaping design criteria, construction material and the services and amenities for each development phase.
Other Consulting: In addition to developers and land owners and brokers, the company also provides consulting services to investors interested in purchasing businesses with land or other real estate assets. In addition, the company provides consulting services to banks, real estate trade associations and governmental property and planning agencies.
Real Estate Information Services
The company developed the proprietary CRIC system to support its primary and secondary real estate services and consulting and information services. It has commercialized the CRIC system to provide real estate information services. The company markets and sells, on a subscription basis, the use of its database and search and report generating functions. Subscribers of its CRIC system include a variety of entities. In addition to property developers, land brokers and other companies in the real estate industry, subscribers of its CRIC system include banks, insurance companies and other financial institutions and appraisers who require real estate market and transaction information to provide their services. Other subscribers also include those in academic and research and the national and regional governmental agencies, who are interested in the macro economic implications of the data, and those in the home design industry or the media industry, who are interested in the demographics of a targeted area.
CRIC System
The company’s proprietary CRIC system contains the comprehensive set of real estate sales data in China covering information on land, residential, office and commercial spaces, as well as real estate related advertisements. As of March 31, 2007, its CRIC system contained data on developments in Shanghai, Beijing, Tianjin, Chongqing, Chengdu, Wuhan, Nanjing, Hangzhou and Shenzhen, consisting of data on approximately 6,573 tracts of land, approximately 14,524 housing developments, approximately 2,397 office buildings and approximately 2,334 commercial developments. In addition, its CRIC system contains data on the local businesses and services, such as schools, transportation and hospitals. The company’s CRIC system consists of interlinked database, map, report and library functions.
The company’s CRIC library contains internally generated market studies, topical studies, project feasibility studies, form market reports and periodicals, as well as a collection of real estate news and articles. For each project, the database records the total architectural and residential GFA, floor plans, construction materials, percentage of green space and in various cases the commercials and promotional materials used for the sales and marketing of the project. For each unit, the database records the selling price, GFA of each room, title history as well as material used in home improvement. The relevant property information is searchable through string queries or through clicking on the corresponding map. The map also contains visual presentations, in satellite or two-dimensional form, of information on local businesses and services, such as metro stations, hospitals and schools in the surrounding area. Users can use an assortment of tools built into the software and can sort and generate reports based on an array of search fields.
Competition
The company, in the primary real estate agency services market, competes with World Union Real Estate Consultancy (China) Ltd.; Hopefluent Group Holdings Limited; Shanghai T&D Real Estate Co. Ltd.; and B.A. Consulting Company.
The company, in the secondary real estate brokerage services market, competes with international and domestic real estate brokerage firms, including Century 21 China Real Estate; Centaline Group; Coldwell Banker; Shanghai House Exchange Co., Ltd.; SUNCO Real Estate Co., Ltd.; and 5i5j Real Estate Co. Ltd.
The company, in the real estate consulting and information service market, competes with other international and domestic real estate services companies which provide real estate consulting services, including DTZ International, Jones Lang LaSalle, CB Richard Ellis and First Pacific Savills.
History
E-House (China) Holdings Limited was founded in 2000.
