Prop-Log serves as an illustration of the challenges facing eCommerce start-ups. As a late entrant confronting well entrenched competition, the portal struggles to gain a foothold in the property sector. This even though it has a distinct business proposition and features that benefit the key players in the property ecosystem.
The emergence and growth of online property sites disrupted the way properties are transacted, fundamentally altering how prospective buyers and tenants search for properties, and how they connect with property owners and their agents.
Initially these platforms provided basic listing services. Overtime however, they grew more sophisticated through the use of technologies such as data analytics, virtual reality, block chain and artificial intelligence (refer Exhibit 28.13).
As their role expanded, and as their influence grew, the portals displaced conventional classified advertisements as the primary channel for connecting buyers with sellers and tenants with landlords.
Today, real estate agency offices are no longer as omnipresent as they used to be. And the advertisement of properties on billboards, yellow pages, telephone directories, and radio/TV has also sharply declined.
As for the real estate agencies and their property agents, they have lost control of a key element of their marketing mix — advertising. The property sites are the advertisers, and they advertise their portals.
It has also become practical and viable for property owners to directly advertise their properties for sale or for rent on For Sale by Owner (FSBO) and FRBO portals, thus bypassing the property agents.
That being said, property agents remain deeply entrenched. While they rely heavily on the online platforms to connect with prospects, they continue to remain heavily engaged in the transaction process. This despite the advent of the FSBO portals.
The leading online platforms in the crowded Singapore property market are PropertyGuru, iProperty, SRX, 99.co, EdgeProp and RealHome. Additionally, the FSBO segment includes Carousell, OhMyHome, DirectHome and Soho.
PropertyGuru was the first-mover into the market, and despite growing competition, it remains a dominant force. The company claims that its portal accounts for 70 per cent of the market transactions, with more than 5.5 million property hunters in Singapore using their site every month.
Resulting from its dominant market share the balance of power has shifted markedly in PropertyGuru’s favour. Since they rely so heavily on the portal, PropertyGuru commands extraordinarily high leverage over its core customers, the property agents and the real estate agencies.
Exploiting its leverage, the portal is becoming notorious for its price hikes. Two years after a backlash over prices, PropertyGuru adjusted prices up in September 2021 by a further 10% to 25%, across its four service packages.
While these tactics led to a big increase in PropertyGuru’s margins in Singapore and fuelled its growth into other market, they resulted in an increase in the property agents’ cost of doing business.
When Prop-Log.com entered this saturated market in 2021, it had to confront well entrenched players. To outflank these competitors, Prop-Log positioned itself as an advertising channel, i.e., a property portal and an advertising channel. According to the platform’s website:
“Prop-Log lets you advertise your property on Google so that customers land directly on your property page.
“Other portals charge you subscription/listing fees. Then they advertise their portals, NOT your property. And your house or commercial establishment gets lost in a jungle of 50,000 to 100,000 properties! So, you are told to buy ad credits! Boost! Rely on opaque algorithms that determine how much you pay.
“Prop-Log is different. It lets you advertise YOUR property on Google such that customers land directly on your property page”.
Exhibit 28.14 provides an illustration of how a typical Prop-Log property search ad would appear on Google.
Conceptually Prop-Log’s approach to advertising is similar to co-operative advertising at supermarkets. As highlighted in the exhibit, it advertises its listed properties. The phone number in the ad is property agent’s/owner’s phone number. And when prospects click the ad, they land directly on the advertised property’s webpage.
What truly distinguished the platform is its cost structure. Prop-Log is developed and sustained primarily by its founder who maintains a minimum cost base. So much so that the platform can survive without charging subscription or listing fees, relying predominantly on advertising commission.
With the view to keeping costs down, Prop-Log remains focussed on the core purpose of match-making buyers and sellers, without adding too many extras. It is heavily centred on the use of technology to make it quicker and easier for its users to buy, sell or rent properties, as well as to keep down the cost of doing business.
Another distinguishing facet is that Prop-Log is a global platform that can be locally customized. While its focus during launch has been on the Singapore market, it can list properties for any of the countries supported by the Google Ads platform.
Prop-Log is also analytically advanced. With an advance in-built search engine designed specifically for property searches, the portal claims it offers the quickest way to surf for properties.
At the onset, an eCommerce strategy must rely on being discovered in cyberspace. Hence, Prop-Log needs to chalk out SEO plans to raise the platform’s rank on search engine results page. And since this takes time, Prop-Log must rely on search advertising to gain traction, particularly during the initial years of launch.
One of the biggest challenges for a late entrant like Prop-Log is to divert traffic from entrenched competitors. Here it relies on a pull strategy to attract prospective property buyers and tenants, offering an easier and faster path to their new homes. The assumption being that if prospective buyers and tenants flock in, property agents and homeowners will embrace the platform.
That assumption is flawed. The strategy is complicated by the fact that buyers and tenants will only come if in addition to superior in-use experience, the platform maintains rich content, i.e., a wide range of genuine listings. In this chicken and egg scenario, the platform needs to pull both ways. Sellers attract buyers to the online portal, as much as buyers attract sellers.
Considering that the support from agents is vital, Prop-Log is seeking ways to build strategic alliances with property agencies. The management, however, is acutely aware of the inertia within the marketplace. Despite the lower cost of doing business at Prop-Log, agents and agencies are reluctant to embrace the platform. They are already listed on a number of well-established portals and are not convinced of the benefits of moving to yet another platform.
In light of these formidable challenges, the key to Prop-Log’s success lies in an effective digital marketing strategy that articulates its value proposition in ways that resonate with property agents, real estate agencies and property owners. The firm needs an effective relationship marketing strategy to build bonds with these core customers.
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