Germany-based property portal Lamudi entered Burma two years ago by establishing House.com.mm, which has since become the country’s largest online real estate marketplace. On the website, sellers, buyers, landlords and renters can advertise and find homes, land and commercial properties. Recently, Lamudi cofounder Kian Moini visited Burma to meet with developers and real estate agents. He spoke with The Irrawaddy about how a low Internet penetration rate affects his business, and how House.com.mm plans to expand in the future.
Question: Can you describe your presence in Burma?
Answer: House.com.mm arrived as part of Rocket Internet [the parent company of Lamudi] in Q4 2012, because Rocket Internet saw potential in Myanmar [Burma] at a very early stage. We have been established as one of the top 100 websites in the country already, which is very strong for a real estate platform. It’s always a larger challenge to establish yourself in a market where Internet penetration is still low, but we are doing very well in educating the market in the shift from offline to online. Now if you look at House.com.mm, we already have more than 17,000 listings online, and an accordingly high number of agents and brokers who trust us with providing them a value. We have many thousands of visits per day. We’re still at a very low rate, but Internet penetration is increasing through computers and more so through mobile phones.
Q: Of the 60 million or so population in Burma, only about 8 million people are mobile phone users. Even so, do you expect your website to continue growing?
A: Very much. Our business is driven by Internet penetration and smartphone penetration. The infrastructure first has to be built to make Internet available across the country. The same goes for smartphone penetration—infrastructure must be built so that people have connection to 3G, and then smartphones must actually be in the market. There’s an increasingly high number of affordable smartphones in the market, and I’m sure smartphone penetration will grow exponentially over the next one or two years. We have responded by launching an Android application.
Q:Do you have plans to work with developers, in addition to real estate agents?
A: Absolutely, we have been focusing the first part of operations on agents and brokers, and now we are also increasingly targeting developers. Our website will tailor more to the needs of developers, which is following the trend in general in developing markets. New developments make up a big part of the market.
Q:What is your business model?
A: It’s very straightforward. For agents, brokers and developers, our website is a marketing channel for them to offer their properties, so we charge for them to use this advertisement channel, depending on the number of listings they want to advertise or the number of products the developer wants to advertise. Then we also have a classical online advertisement channel, which is the banner space that we have on our website, we offer those for a fee. The user will never be charged—for people who come to the website, it will always be for free, and the application is free to download.
Q: You have traveled a lot in Southeast Asia. Can you compare Burma’s market to the market elsewhere?
A: It’s aligned with the Internet penetration rates. For instance, in Indonesia, competitors of ours were in the market for a couple years, which meant they had already shown how to shift from offline to online. In Myanmar, we are driving the shift. There have been a few more challenges in the first few months, but now in the last few months we’ve really grown tremendously. In Yangon, we have signed eight out of 10 of the biggest brokers, if it’s not even 10 by now.
Q:What is your biggest challenge working here?
A: The biggest challenge is educating the clients, not only about how to use online [portals], but also how to use the Internet. We explain the the website, how it works and what value we have. …The second step is getting the agents to understand that the better the quality of their listings online is, the better the user experience, and thus the more likely the user is going to call and make an appointment. What I mean is, when you have a listing online, how many pictures do you have, what is the quality of the pictures, and do you clean up the place before you take the picture? There are many things that people just don’t think of, and we’re here to help. We’re not only here to sell a service—I see us as an online marketing consultant.
Q: Your focus currently seems to be properties in Rangoon. Any plans to expand your reach?
A: We have already started in Mandalay as well. Since the Internet penetration is still difficult outside Yangon, we are probably not going to take the next steps too quickly. Eventually we want to be across the market, across the country, but this only makes sense if we have Internet across the country.
Q: Are you eager for Telenor and Ooredoo to launch their operations in telecommunications?
A: This is most likely going to give us a big push as well, yes.
Q: Do you cater more to foreigners or to local clients?
A: Our focus is on the local market because most of the transactions are local. But at the same time, we have a global brand, our Lamudi.com, which House.com.mm is part of, is in 30 countries.
Q: Do you have any competitors in Burma?
A: To be honest, there’s no competitor that we consider a true competitor here. There are a few smaller property portals but they don’t match in expertise.
Q: Are real estate prices relatively higher in Burma than elsewhere in Southeast Asia?
A: That’s difficult to say. I wouldn’t be able to comment now on a price average or on a specific price range compared to other countries. Across most Asian countries there’s been an increase in very upscale developments, very expensive apartments and houses. At the same time, affordable housing is growing on a very large scale. Now in Myanmar we are probably more at this stage where there’s a larger increase in developments for upscale, but I’m sure it will not take long until the medium and lower scale ranges will come in as well.
