Monday, June 9, 2014

Are property shows to reach out to NRIs really helpful to Real Estate Developers?

Author: Sachin Gupta | Find me on Twitter

We are all accustomed to seeing property show/exhibition advertisement in daily newspapers. This is one of the many ways in which real estate developers reach out to real people, it is claimed. While builders in India use multitude of channels to reach out to resident Indians including print, TV, radio, internet, SMS, and property shows, how do they reach out to Global Indians? Do they really care about investment from Global Indians? A cursory glance at the website of various builders will suggest that “YES”, they do care, because most of them have this wonderful “NRI Corner” tab on their websites.

In 2013, upwards of 70 billion US dollar were remitted by Global Indians into India. This is highest among all the developed or developing countries. Wooohooo….where is this massive money going? Which sector? We covered this in our previous post about NRI remittances. Although, there is no segmented data of how much of this money is going into real estate, yet it seems a significant amount.

However, most of the Non Resident Indians worry about the upkeep, and management of their property.  Many NRIs would like to invest in realty sector in prominent Indian cities such as Gurgaon, Noida, Mumbai, Bangalore, etc. For example, Ashish Sharma has a budget of around 1 crore and wants to invest in Noida. But Ashish is worried what will happen to his apartment since he does not have anyone to take care of the property. This is where Property Management Company in Noida can assist Ashish in managing his property. This way, not only will he be able to invest in Noida real estate, but at the same time, he will be able to generate monthly rental income.

Now, the question to be asked is how Global Indians decide on investing with a particular developer given the fact that most of them would not even know the names of more than 5 developers? Maybe by talking to their resident friends or family members or maybe by researching on internet…but these are all Maybes, we do not have any metrics or analysis which points to a particular channel or combination of some channels.

Real estate developers, it seems, adopt following 3 channels to reach out to NRIs:
  • Web

  • Property Shows in foreign countries such as Dubai, UK, USA, etc.

  • Sign up local brokerages


Let’s do the Pros and Cons of each channel:

Pros and Cons of Web:
By web, we mean, having a website, social media marketing, search engine marketing, search engine optimization, etc. 

Pros
  • Helpful in creating awareness

Cons
  • Non Segmented targeting
  • Generic in nature

Pros and Cons of Participating in Property Shows in Individual Cities:
Property shows are organized by an event management company. The show is typically organized in a big hall wherein 15-20 developers can set up their 3 feet by 3 feet table and address the people who visit that hall. In addition, there will be a banking partner and a local media company. That’s it. Some property shows may showcase 40-50 developers. And the show usually lasts for 2 days (normally weekend). But these shows are so boring that why would someone waste his/her entire day unless there is some networking opportunity.

A property show management company who organizes such events in Dubai is again organizing the event in the month of June 2014. In last 7 years, the company has done about 18 such shows with 150000 visitors. Let’s do some calculations…..150000 visitors for 18 shows…that means about 8333 visitors per show….or in other words 4150 visitors a day for a 2 days show. Hmm…..

Are property developers happy with these numbers? How much money did they spend for this kind of show? We don’t know….anyone with this number in mind, please comment :)

Anyways, in this business of explaining property shows, we forgot about Pros and Cons…here it is!

Pros:
  • Help in reaching out to limited people (not more than 8000 to 10000 for a 2 day property show). Hey, is it a Pro? Yea, something is better than nothing :)
  • Limited brand exposure. Obviously, fewer the people who visit the show, fewer the chances of brand recollect.

Cons:
  • City / Country specific
  • High cost of participation for the developer (participation fee + air ticket + hotel + daily allowances to staff)
  • A typical customer takes time to understand the market and trends. Therefore it is highly unlikely that he/she will buy the property on spot
  • You may go to London to sell your Mumbai Project, but how many people of Mumbai origin will visit you?

Why the hell then developers participate is such shows? Lack of creativity or maintaining the status-quo seems to be the answer. Let’s see, if something better than this comes up in future.


Pros and Cons of Signing up Local Brokerages:
Local brokerages are the local property agents of real estate developers in select countries. For example, ABC developer may take services of property agents in Singapore, Malaysia to sell his Chennai project.

Pros:
  • A local property agent has sound relationship with his/her clientele; therefore he/she is in much better position to realize the property transaction

Cons:
  • Limited channel partners internationally
  • Challenges of motivating them to sell your property


All in all, it is a complicated matter for real estate developers. And we are sure; they will sit in their board rooms and will come up with new ideas, strategies to reach out to NRI, PIO, and OCI audience. 

Meanwhile, don’t forget to tell us how much it costs to participate in an overseas property show with limited footfall and limited brand awareness :)

Cheers



Have any Questions?

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