Indonesia’s property market is on the rise. PriceWaterHouseCoopers (PWC) and Urban Land Institute USA have placed Indonesia as one of the big three Asian countries with the highest potential for property investment. Jakarta and Bali are the two cities in the country that offer great prospects.
Founded in 2013, Lamudi is a real estate marketplace that offers sellers, buyers, landlords and renters an online platform to buy, sell or rent homes, land and commercial property. Within a relatively short time the platform has reached more than 20 countries such as Indonesia, Algeria, Bangladesh, Morocco, Pakistan, Peru, the Philippines, Rwanda, Saudi Arabia, and Uganda.
With the recent fundraising of US$7 million to focus on developing Lamudi operations in Asia, the real estate marketplace is optimistic about becoming the market leader in online property in Asia.
Kian Moini, Co-founder and Global Managing Director for Lamudi.co.id explains to us how Lamudi will answer the challenges encountered in the online property marketplace business in Indonesia.
What encouraged you to open an online property marketplace in Indonesia?
Lamudi rolled out in Indonesia in February 2014. We brought Lamudi to Indonesia because quite simply, we saw a demand in the online property market that wasn’t being met. More and more people have access to the internet now and are turning to the web to purchase goods — including real estate. As the online real estate market grows, so does Lamudi’s reach worldwide. The search for real estate is moving online and we want to help people to find the right property. We want to be there to grow alongside the rate of internet usage in emerging markets and we see great potential for this in Indonesia.
What is your view on the current property market in Indonesia and what could be its future?
At the moment, the property market in Indonesia is in a state of flux. Prices are rising continuously, which is a challenge for both house hunters and investors. At the same time, demand is also increasing, thanks to the strong economic growth that the country has seen in recent years. Indonesia has a young population — more than half of Indonesia’s 250 million people are aged 30 or below — and a large number of these youths will soon be looking to buy their first homes. This presents an incredible opportunity for a business like Lamudi.
How is the business model of Lamudi? And how is the revenue generated?
Lamudi is a Rocket Internet venture. Rocket is the fastest and the most successful online venture builder across the globe and has been building online companies worldwide since 1999. Like most Rocket Internet ventures, we follow the proven business models of established players in established markets. Revenue is generated by listing packages we sell to professional agents, brokers and developers, as well as classical banner advertisement on our website. Additionally, anyone listing on our website can purchase higher visibility through featured listing space.
How big is the online property market in Indonesia?
The online property market is a derivative of the underlying property market and the Indonesian real estate market is one of the strongest in the world. Indonesians are some of the most tech-savvy consumers in Asia, with some 75 million web users and counting. In terms of internet and mobile usage in Asia, they are well ahead of regional trends, making it one of the most promising countries for online purchasing.
How is the online property market as compared to the offline one?
The fact that we grew more than 100 per cent in just three weeks indicates that the property market is moving online. More and more Indonesians are switching online to do things like shop for clothes, so it is natural for them to look for a property to buy or rent too.
How do people usually operate on online property websites? Online property websites are used to take the relevant steps to buying or renting a property. This starts with searching for relevant properties within our consumers’ price bracket. Once a property has been found, these platforms can be used to contact property agents, request call backs for further information on specific houses, and finally purchase the perfect property.
What does Lamudi as a website offer? Does it serve as a directory or a price comparison site?
At Lamudi, we offer customers the highest quality and most relevant property listings from top agents and sellers. These include residential properties to buy or rent, commercial spaces for leasing and even plots of land. We benefit consumers by putting them in touch with some of Indonesia’s top real estate agents and most trusted sellers, through an easy-to-use, secure platform.
What kind of consumer trends have you observed in Indonesia? Do people buy property for their own use or for investment?
Indonesia is making active efforts to move away from the resource dependent economy and wants to stimulate creativity, as directed by the Ministry of Trade and Consumer Economy. We want to be part of that initiative. The young population of Indonesia — 50 per cent are 30 years old or younger — will soon be buying their first properties for their own use, and we are offering a tool that helps them do this more effectively.
What do you think about the price of property in Indonesia?
Indonesia’s property prices are continually rising, which is a real challenge for house hunters and investors alike. At the same time, demand is also increasing, fuelled by the country’s strong economic growth in recent years. This presents an incredible opportunity for a business like Lamudi.
How is Lamudi doing so far? Our success is measured by much more than just one metric. However, we are already a successful business: in the first six weeks, we achieved 25k listings, and as of today, it is already more than 38k listings, and we are continuing to expand throughout Asia. We have a strong team in place in Indonesia and the rest of Asia, as well as talented staff based at our headquarters in Berlin. We know we have the best team and the best resources to succeed in Indonesia. But we also know that consumers want a product like Lamudi and they already like our platform. Meeting consumer demand is one of the keys to building a successful business. We currently operate in 25 countries, and globally more than 200,000 property listings were put up in March alone.
As a newcomer in online property, what is your strategy against the incumbent players in Indonesia?
We believe that competition is a good thing for consumers: it means they get a superior product at the end of the day. But our product has crucial points of difference from our competitors, so there is always room for platforms like Lamudi that give consumers more choice and a higher quality service. Our greatest asset is our people. We have a young, talented staff, both here in Indonesia and based at our headquarters in Berlin. We believe in investing in their training and development for the future.