Square Yards — The poster boy of India’s emerging Proptech market, witnessed its overall market share surge from ~3% to ~18-20%, as its tech platform became the point of convergence for developers and buyers alike.
Square Yard’s deep faith and focus on bringing technology to the Indian Real Estate market turned out to be a gamechanger as the COVID-19 lockdown as the giants found their options limited. Entered Square Yards to save the day with its proptech expertise – from a complete virtual real estate experience – comprehensive 3D walkthroughs and virtual property tours – to ensuring the entire home buying cycle journey through digital workflows.
High on momentum and fiercely planning the course ahead, Co-founder and CTO of India’s largest integrated real estate platform Square Yards, Vivek Agarwal tells us about the pandemic experience and the learnings picked up on the way.
Q: Please briefly tell us about Square Yards and your entrepreneurial journey in the Real Estate sector.
Breaking ground in 2014, we have achieved significant scale in just 6 years and are one of a few Indian start-ups that have successfully expanded globally. Recently listed in the prestigious FT Top Asian Companies 2020 list, the Red Herring Asia Top 100 technology list, as well as being the ET Growth Champion of 2020, the company has witnessed exponential growth in a very short span of time. We have a direct presence in 25+ cities globally and have more than 3000 employees across 9 Countries. Today, we rank in the top 20 consumer tech start-ups in India in terms of GTV (~USD1bn), top 50 in terms of revenue (~USD50mn), and are among the handful of profitable consumer tech start-ups in India.
Watch: Square yards is one of the fastest growing companies
Square Yards’ integrated online to offline (O2O) transactional model, and positioning as a one-stop-shop for entire home services, (new homes, resale, rentals, property management) brings exhaustive supply, demand, and distribution together to tap the highly fragmented brokerage market.
My own journey started when I set up Square Yards’ technology division as Co-founder and Chief Technology Officer in 2015 along with Hitesh Singla, Co-founder, and Chief Information Officer, spearheading the tech and product platform and research capabilities of the company. The technology was, and will always remain the key to scaling up Square Yards’ operations, and we turned to proptech to power and assist the sales process, wherein data, products, leads and automation drove the value chain, while an agent acted as a conduit to deliver these.
Technology also solved the market’s typical data asymmetry problem through search and discovery. It brought standardization and comparative market analysis, thereby reaching a wider target audience while empowering them with decision-worthy data. Tech also helped manage and digitalize complex and bulky real estate documentation.
On the internal efficiency side, key business metrics like lead acceptance ratios, first time to response (FTTR) and average met ratios all improved, translating into more site visits and more closures. It rapidly raised Square Yards’ operational efficiency, quickly beating the industry average, and enabled the business to scale in a non-linear manner; meaning that we were able to grow revenues faster than expenses, especially when compared to traditional peers.
Q: How has the pandemic impacted customer queries and overall business at Square Yards?
The pandemic may have caught the real estate sector unaware; but it was a blessing in disguise for us At Square Yards. We used the present market conditions to push forward digital solutions for the sector along with structured products, with the largest developers in India. We treated homebuyers to a virtual real estate experience, offering them comprehensive 3D walkthroughs and virtual property tours, and completed the entire home buying cycle journey with digital transaction modules which seamlessly connected real-time inventory, online bookings and payments and all associated paperwork through digital workflows. The response was staggering, and we quickly increased our market shares to 20% (India Primary) and 80% (Gulf NRI Primary), becoming a distribution force to be reckoned with.
Square Yards sold over ~3700+ units online, worth INR ~2200+ crore, in the lockdown period. Its market share of various top developers’ distribution portfolios moved from 5-20% to 60-70% over the last 3 months; and overall market share surged from ~3% to ~18-20%.
Throughout the pandemic, we maintained a constant flow of real estate information with various stakeholders, including customers, channel partners, and other people in the value chain, through video-conferencing tools and virtual interactive mediums. It resulted in a record 900,000 interactions per week, and 75k+ queries on our Square Beats app during the lockdown. Our systems and tech processes clocked 2,50,000 leads, 20K+ virtual site visits, and meetings and about 1,150 average property transactions monthly.
Q: What type of challenges are you having to deal with as you try to regain momentum in the Unlock phases?
On the performance side of things, we have been in high momentum mode right through the lockdown, thanks to a tech-fueled journey that proved to a sector – infamous for its inertia towards change – that homes could be sold through fully online processes. Going forward, as the economy unlocks, we want to keep powering our sales teams, while taking this winning momentum forward through intelligent, next-gen tech adoption and aggressive hiring to fuel the next leg of growth. Keeping our finger on the pulse of the housing market and the trends shaping the future of the real estate, we will be constantly fine-tuning our business playbook and plugging any serviceable gaps in the distribution system.
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To fulfill these futuristic goals, we plan to recruit 2000 employees in India and 500 employees for our GCC operations. This will enable us to strengthen our existing workforce as we take on new geographies and consolidate the fragmented market through technology. Newer verticals like property management, enterprise SaaS offerings, where we are already making headlines, will continue to be at the center of our unlock business initiatives.
Q: What kind of long-term effects do you expect the crisis to have for firms such as yours?
At Square Yards, we do not speculate on the future, but are always prepared for multiple and varied outcomes. Markets across the world have an amazing capability and track record to surprise the non-believers. Our pivot to a wholly online sales model is testament to this fact. Square Yards also believes firmly in disruptions, which result in industry-leading performances and revenues.
The pandemic has opened a window of opportunities for proptech entities like us. It has put us in a position where we can better anticipate the future state and consciously adopt new ideas with success to drive future demand.
On the whole, things are changing, and here are some key takeaways among many that are evident today. First, as remote work comes into sharper focus each day, staying physically close to offices and city centers will not be a requirement anymore. This will shift the spotlight increasingly to Tier 2 and 3 cities, increasing demand for organized, affordable housing schemes. The size of the average home will go up too, with the need for an inbuilt home-office space.
Among the various real estate asset classes, residential and industrial will significantly outperform hospitality, commercial, and retail; and home-ownership will become a top priority for renters in the medium to long term.
Q: How will the technology footprint in the sector change as we move ahead?
The Covid-19 crisis has sent the traditional real estate business model on a long sabbatical. It has made proptech a new essential for realty players to enable business continuity and ride out of this crisis. As it is, homebuyers had been doing a lot of their initial home search work online and they become increasingly hesitant to visit crowded sales galleries and interact at close quarters with unfamiliar sales executives, more and more real estate will be sold online.
But with housing sales collaterals going online, the skill and charm of the sales promoter, which had a disproportionate influence on the customer’s decision, will become redundant. Browsing through tonnes of sales collaterals, terms and conditions will be a deterrent to efficient sales performance. This would enable entries of various comparison-shopping portals. These portals will parameterize competing products—reducing enthusiastic prose to mundane math—in order to equip customers to objectively evaluate options side-by-side.
Also, real estate builders will now have to work seriously to build online trust by going beyond things that are in their traditional ambit, to provide today’s highly aware home buyers with a seamless experience right through the long purchase cycle. Also, with the historic property sales cycles broken, value chains and points of action will have to be redrawn, reducing channel conflicts and focussing on a sale rather than the ‘all-important’ site visit. As digital adoption accelerates, these few factors that come to my mind will only get amplified.