Beike, a Susidiary of Lianjia, Disparaged by NYSE-Listed Competitor 58.com
YAO Jinbo, the founder of 58.com Inc, disdained Beike and said: website traffic of Beike is growing, but users obtained through advertisement are temporary.
Beike（贝壳）, one of leading open-platform real estate listings portals in China, is growing fast and becoming the biggest competitor of NYSE-listed 58.com Inc (WUBA), but YAO Jinbo (姚劲波), the founder of 58.com Inc, disdained Beike in Conference Call with analysts after 58.com’s 2018Q3 Financial Results released on November 15, 2018.
Last month, Beike disclosed updated data for the platform, revealing that traffic has reportedly risen 500 percent since April while its total of registered agents is up 800 percent.
“Website traffic of Beike is growing, but users obtained through advertisement are temporary, we really do not worry, because we are the best of buying traffic if we want”, YAO commented one analyst’s question. “58.com Inc is a pure platform has cooperation with almost real estate agencies, but many of them compete with Beike”.
YAO’s comment refers to Lianjia (链家, HomeLink), the parent company of Beike, is the largest real estate brokerage firm in China and operates in 32 cities with more than 8000 branches and 150000 employees nationwide as of 2017.
Lianjia, a brick-and-mortar origin company, rebranded its online business to Beike in April 2018, and changed its business model from a vertical website into an open platform claim to only list authentic information, which drawing it into direct competition with the classifieds giant 58.com Inc, who has a market value of about USD 10 billion as of October 2018. 58.com Inc owns real estate listings websites Anjuke, a rival of Beike.
YAO initiated an alliance with brokerages including 5i5j, Centaline Property, and Century 21 China this June, to counter Lianjia and its Beike. According to the data from 58.com Inc, the company serves 50000 property brokerage firms and almost 90 percent of brokers (over 1.3 million) across the country; and over 30 million users search for home listings on its online websites 58.com, Anjuke, and ganji.com.
Lianjia has completed six-round investments, its investors include Baidu, Tencent, H Capital, Vanke, China Renaissance, Hillhouse Capital Group, MatrixPartners China, and the total financing amount exceeded USD 1 billion. Ziroom, another subsidiary of Lianjia, also secured a round of investment in January 2018.
The Wall Street Journal reported that Lianjia was in talks with Tencent and Warburg Pincus to raise a new round investment to support the expansion of Beike, at a value of USD 13 billion to seek USD 2 billion. It was reported in October Warburg Pincus backed out of the talk as pessimism of China’s tech investment has been spreading since July 2018. With Tencent still on board, Lianjia has lowered its price and is looking for new investors.
“Beike is doing difficult but correct things”, ZUO Hui (左晖), Chairman of Beike, and PENG Yongdong (彭永东), CEO of Beike, emphasized this sentence during Beike 2018 Public Class conference on November 11, 2018.
——Author: YuanPu; Write to YuanPu at YuanPu@EqualOcean.com