Online Property Classifieds – Penetration in Single Digit

Property Classifieds market IndiaReal estate advertisement market in India (including print, hoardings and online media) was worth ~Rs40bn in FY14. The online penetration is very small, and all online media (real estate classifieds, Google) accounted for only ~Rs3bn (~8%) of the total market.

CommonFloor and Housing.com two new kids on the block – having a very media mind & voice share, are still lagging behind the early entrants in the supply side. We believe that although having access to capital helps, beefing up this part of the business is more about on the ground execution rather than platform, and will take time.

How the Top 4 99Acres / MagicBricks / CommonFloor / Housing.com Stack Against Each Other ?
In terms of traffic (monthly unique visitors from desktops/ laptops), MagicBricks seems to have stolen a march over 99Acres in the last 6-8 months. This data however does not include mobile traffic, which accounts for at least 30-40% of traffic on most Internet portals in India. We believe that even after including the mobile traffic data, the picture isn’t likely to be too different (in terms of trends).

However, digging one level deeper and looking at the quality of traffic, (from Alexa), we find 99Acres is ranked higher than MagicBricks – has higher user engagement, but also has higher dependence on search engines for getting traffic. Housing has better metrics than 99Acres but in terms of user engagement (page views, bounce rate, time spent on site), 99Acres isn’t too far behind.

While there could be differences in definitions, rates of refreshing and removal of expired ads, we find that 99Acres generally has the highest number of listings, with MagicBricks the close second. However, MagicBricks has much higher proportion of verified listings compared to 99Acres. We found it surprising that the share of verified listings for 99Acres remains in high-single digits despite the company augmenting its sales force.

We also look at android app download statistics to get a sense of the relative positioning of the key players. Here, we find Housing, which is most aggressive in marketing spend, is much ahead of peers.
Android App Downloads
99Acres 500,000+
MagicBricks 500,000+
CommonFloor 500,000+
Housing 1 Million+

The attractiveness of the opportunity is evident from the rising interest of entrepreneurs and VCs alike in this space. The competitive intensity in the segment has risen sharply in the last 15-18 months, due to the entry of well-funded and aggressive players.

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