 "Brotin Banerjee")
The real estate sector is at the cusp of a change where one would see properties selling online in a big way soon, according to Brotin Banerjee, managing director and chief executive, Tata Housing Development Company. In a conversation with Mansi Taneja, he talks about how internet has revolutionised the way homes are sold and how there is a rising appetite for online sales in smaller towns and cities. Edited excerpts:
Tata Housing is aggressively tapping the online segment for generating sales. What has been the response in terms of sales/revenues?
Online home buying is not just spurring a trend in consumption of real estate but is also a new avenue for sales. We launched the real estate category with Google's Great Online Shopping Festival in December 2013. Soon after, we launched our flagship online property National Home Buying Day. These, along with the launch of our e-commerce portal, have resulted in Tata Housing listing all its projects in affordable, premium and luxury segments online. Till now, 1,500 units have been sold online. We have launched an integrated payment gateway to allow customers to buy homes online.
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Online bookings have increased by over 100 per cent compared to last year. Recently, we sold a Rs 5.5-crore villa (Myst in Kasauli) and Rs 4.5-crore apartment (The Promont, Bengaluru) via online medium to customers in Mumbai, addressing the challenge of geographic barrier. We are expecting the medium to contribute 30 per cent of our overall sales in the next three to four years. (Currently, the share is miniscule compared to overall sales).
What is prompting consumers to buy online? How far are we from the scenario when consumers will buy real estate through the web in a way they buy other retailer products?
We have constantly yearned to stay ahead of the curve and embrace a culture of innovation. Today, the internet has emerged as a major factor influencing consumer behaviour. Consumers are more informed about the brand and the model that they want to purchase backed by online research. The virtual medium has opened up more avenues as well as broken down barriers between a buyer and a seller. The Indian consumer is now opening up to buying products that are not traditionally sold online such as real estate and cars. In the real estate space, the buyer has direct access to the company, which is driving purchasing power in the virtual space.
Which cities are contributing the most to the online sales - metros or smal towns?
Urbanisation and the advent of e-commerce have played a significant role in changing the lifestyle and spending patterns of consumers. We have witnessed a rising appetite for online sales from Tier-II and Tier-III markets, which jumped from 11 per cent in December-January 2013 to 30 per cent in January-October 2014. Online buyers have emerged from cities such as Patna, Chandigarh, Ranchi, Jaipur, Indore, Baroda, Surat, Trichy, Bhubaneswar and Leh, amongst others.
Out of the total online buyers in your projects, what is the percentage of non-resident Indians (NRIs)? Also, out of total offline sales, how much is contributed by NRIs?
NRIs have been strong evangelists of the online platform with 25 per cent of buyers between January and October 2014 being from the US, the UK, UAE, South Africa, Hong Kong and Australia, among others. The NRI share in the online sales has increased from 12 per cent in 2013 to 25 per cent in 2014.
How has the Indian real estate landscape changed over a period of time? Would online medium revive the realty sector?
Indian real estate is going through a transition. The sector is more organised with the entry of international players, foreign investors and Indian corporate houses. Also, many policy reforms such as 100 per cent foreign direct investment and the introduction of real estate investment trusts would benefit the sector. The online space has evolved over the years and opened the market to national and global buyers.
How many launches have been planned for this year?
We would be launching six to eight projects across all segments - affordable and luxury - this year.
When do you see a revival in the sector?
With moves such as low interest rates, there will be increased liquidity that will shore up demand and supply in the sector. The second half of 2015 is expected to see a turnaround with sales of projects expected to rise. This year is expected to be a game changer for the sector.
