The residential real estate market is a high growth industry in China. According to an Ibisworld report, the industry grew 9% annually over the last five years to be worth $949 billion in 2015. The industry is also not immune to the advancement of Internet in the country. There is an increasing presence of an online-to-offline model where online portals such as SouFun (SFUN) and Leju (LEJU) not only help facilitate buying and selling of houses but also offer additional services geared towards the home owner. Then there are several smaller ones that are creatingLEJU a ripple by creating pricing wars and following a niche market focus. One such player is Billion Dollar Unicorn Aiwujiwu.
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Aiwujiwu’s Offerings
Shanghai-based Aiwujiwu was founded in 2014 to offer an online platform to people looking to buy and rent properties in Tier 1 cities in China. The company was founded by three former executives from Tudou.com, the Chinese online video platform. It operates the iwjw.com website that has built a professional network for property owners and potential buyers and tenants.
Tenants can search residential rentals and take virtual tours for most of the listings on iwjw.com. It also connects buyers with individual sellers for second-hand and new home sales on the market. Aiwujiwu maintains a quality check by ensuring that it was founded by three former executives from Tudou.com, the Chinese online video platform. The site allows for location-based searches and acts as a virtual agent by allowing consumers to book visits using their smartphone. The company operates in ten markets including the four big ones of Beijing, Shanghai, Shenzhen, and Guangzhou and has allowed people living in Mainland China to purchase or rent properties in these cities and as of November 2015 claimed to have sold nearly 6,000 apartments through its portal.
Aiwujiwu’s Financials
Aiwujiwu earns revenues by charging a 1% commission on home sales facilitated by its web site. It does not charge any fee toward rental services. Traditionally, agencies helping tenants charge a month’s rent as commission for their services. Aiwujiwu entered the market by focusing on the home lease business and initially cutting the commission from a month’s rent to half. It also poached brokers from brokerages by promising to at least double their base salary. Today, it offers no-fee rentals and has become one of the favorite of customers searching for rental properties.
