The development of e-business
in property agency industry
in Greater China
•
Introduction
What is E-commerce?
It is the integrated use of the computing
and communications technologies for
commercial transactions, including the
transfer of information, products, services
or payments via electronic networks.
Types of E-business operations
1. B-B (business to business)
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

most common type today
transactions take place between business partners in the
internet environment
e.g. GE (General Electric) EC system
2. B-C (business to customer)
•
retail business in the internet
•
e.g. Amazon.com
environment
3. C-B (customer to business)
•
provision of “Marketplace” for customers to buy their products in
the internet environment.
•
e.g. priceline.com
4. C-C (customer to customer)
•
•
Customers sell directly with other customers in the form
of auctions or classified ads in the internet environment.
e.g. eBay.com
Marketplace / Marketspace
• A virtual market place where buyers and
sellers can interact with each other to
complete a commerce transaction.
• It is a Agent Based System
- dbase engine
- searching engine
- Internet logistic implementation system
- Internet payment gateway
Technology Factors
• Telecom Infrastructure
(e.g. broadband internet network,
set-top box)
• Privacy & Security
(e.g https, cryptograph, encryption)
(e.g e-cert, digital signature, public key)
• Payment gateway
(e.g. SSL, SET)
• Intelligent
(Cookies, servlet program)
I, C
I, C
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Sociology Factors
• Privacy
• Lifestyle Change
• Mobility from rural area to
metropolitan
• PRC join WTO
• Population growth
• Consumer behavior change
• Open market information
• Timely Information
I, C
I, U
I, U
I, U
I, U
I, U
I, U
I,U
Economics factors
• Social economic growth
I, U
• Second hand property
I, C
• PRC join WTO
I, C
(non zero sum game, increase 4.6% GDP)
• Currency control in PRC
I, U
(capital inflow/outflow)
• International Banking
I, C
(arranging bank mortgage)
• Lower transaction cost
I, U
• Eliminate agency theory problem
I, C
Political Factors
•
•
•
•
Government regulation on internet
Law implementation by Government
Government control on internet access
Transparence on property transaction
information
I,C
I,C
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Scenario One
Good prospect for e-business
Navigation of marketplace (Property Agency) in terms of
1. Reach
• A platform collects a lot of variety property sites in major cities.
Clicks and Mortar Strategy would be relevant.
e.g. Centaline Agency property makes use of web platform to deal with
potential customer.
• The ability to deal with huge amount of customers locally and from
Overseas in the platform.
Bounded Rationality could be overcome from doing business in physical
location to virtual platform.
Scenario One
2. Affiliation
•
Customer preference would be the trend and customer relationship
Management is the core success factor of property agency.
•
In Post-modernization, sign and virtual reality is important and it
changes the people lifestyle. Individualism of metropolitan citizen
enhance the importance of customer relationship management. Social
mobility of different class in China would demand the fairness and
class identity and Internet could provide the relevant marketing
information to satisfy their needs.
•
Tailor-made service for particular customers e.g. business and
commerce customer of foreign companies may need statistic and
property dealing transaction for decision making - a reducing of
transaction cost.
Scenario One
2. Affiliation (cont’)
•
A united platform of financial service, registration, payment and
property features together with analysis is the basic requirement of a
successful marketplace / Portal in the property transaction.
3. Richness
•
The infrastructure that can provide relevant marketing information to
the consumer is a competitive advantage of a property agency
platform.
•
Marketing information relies on Government policy in PRC for the
regulation to govern the Internet business and it is certainty that PRC
government would provide a competitive telecommunication
environment.
Scenario One
3. Richness (cont’)
•
Relevant and timely marketing information would reduce
the impact of opportunism of the company managers in
control the source of
Information in order to
maximize personal interest at the expense of the
Company - agency theory
Scenario One
• E-business is the non-zero sum game as it provides business opportunity.
The transaction cost in terms of cost saving and efficiency improve the
productivity of the society as a whole.
• The trend of e-business in different direction provide more opportunity
for agency business as strategic alliance with expertise in different area
would join together in a marketplace for business. Centaline is typical
success example to form alliance with Microsoft in set up Intranet and
Internet web (i.e. a market place ).
• The "brand" of "belief" would be the marketing strategy of property
agency since Sony is very success in the brand of belief. Consumer
recognize the technology of Sony in buying walkman and CD player is a
good example.
• Conclusion : good prospect of property agency in
e-business of Greater China.
Scenario Two
 The fast growth of E-business is susceptible
• Based on the recent trend of e-business especially the
Dot. Com Companies, many of them are unstable and
face to be closed down.
• Hit rate is no longer cared by customers and bankers.
Instead, their burn rate are utmost concern.
• Regarding the lifestyle of Chinese, such as Hong Kong
people, they are still not accustomed to buying through
internet or trading through e-business. It will take longer
time to proceed the e-business which may be more than 5
years.
Scenario Two
• Politically, the China Government exert influences or
controls on ISP to deliver some of sensitive information
to Mainland's people so that e-business may not
stretch fully in China market instantly.
• Existing interest parties or Pressure Groups will try
their best efforts to stop the adverse effects of ebusiness on them or their supporters.
• China government may exert their influence when the
e-business arise serious unemployment problems or
social instability.
• Game Theory
Conclusion (scenario 2)
Among the above factors, the effects of e-business on Property
Agency Market are only sudden or new at the start. After many
web sites are formed, people will commence to disseminate the
information and the actual effects will be exposed. It seems that
the effect will not be so substantial in short run since people like
Chinese cannot adopt the e-Business very fast.
We do agree the agency companies to spend money and
efforts on exploring the e-business. However, one cannot rely
solely on it. The traditional way to run property agency business
is still very important and acceptable by most people.
On the other hand, although web sites may help reduce the
cost of advertisement, it is hard to measure whether users will
really base on the said information to search for housing units
and approach to respective company.