Some of China’s biggest e-commerce platforms are teaming up with property developers to sell homes at discounts during this year’s Singles’ Day shopping festival.
The event, held on November 11 every year, was started by e-commerce giant Alibaba Group Holding in 2009 and has since surpassed other shopping events such as “Black Friday” and “Cyber Monday”.
Tmall, Alibaba’s e-commerce platform, said 800,000 homes in 3,000 residential projects – or 40 per cent of major new developments currently on the market – will be available for sale. Each unit will be offered at a discount of up to 1 million yuan (US$151,101).
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The online sales could prove to be a lifeline for China’s developers, which have struggled amid a market slowdown this year. About a third had not completed 60 per cent of their annual sales targets by the end of the third quarter, according to property intelligence provider CRIC. They are also under pressure from Beijing to keep their debt-to-asset ratio at 70 per cent after excluding advance receipts, net debt-to-equity at 100 per cent, and short-term borrowings at no more than their cash reserves.
“The developers will offer more discounts, betting on big e-commerce platforms’ reputation, to shore up their sales and collect as much cash as quickly as possible,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute. “They need to drum up their sales to gain access to cash, to meet the central bank’s requirements,” he said, adding that the online sales were their “best shot”.
Highly leveraged developer Guangzhou R&F Properties, for instance, will put new homes worth 50 billion yuan in 186 of its residential projects on sale on Tmall for Singles’ Day.
Alibaba launched TmallHome, or Tmall Haofang in Chinese, a new sales channel, on September 16 to sell homes online. “The housing market in China has shifted from a sellers’ market to a buyers’ market. Earlier, it used to be that people with money looked for available homes. But, now, in most cities, homes are waiting for potential buyers,” Lu Weixing, TmallHome’s general manager, said this month.
Lu said that last year 80 million people searched for new homes on sister platform Taobao. This year, after TmallHome was launched, 40 million potential buyers checked out homes between September 20 and November 1.
“Developers would like to go online, while buyers are also eyeing up properties. Thus, we see it is a good opportunity to sell homes online,” he added. TmallHome started some presales activity on launch, but most coupons and discounted homes will be released on Wednesday.
Suning.com, an e-commerce platform owned by Suning Holdings Group, said it will partner with more than 100 developers and offer 500 units that will be sold at discounts ranging from 30 per cent to 50 per cent.
Some platforms kicked off this year’s edition at the start of the month and will conclude it on Wednesday.
JD.com, which sold homes during last year’s sales event, started its Singles’ Day promotion on November 1. The company said it recorded a 70 per cent year-on-year increase in home sales during the first 30 minutes. The e-commerce company added that it will sell thousands of discounted homes this year.
Beike Zhaofang, the online property platform backed by technology giant Tencent Holdings, also launched its promotion on November 1. It said it had sold homes worth billions of yuan during the first four days of the shopping event. More than 100 developers will offer a million new homes at discounts of up to 50 per cent on its platform until November 11.
E-commerce has expanded the universe of purchases available to Chinese consumers. Moreover, the coronavirus pandemic has given online shopping a further shot in the arm, with bricks-and-mortar shops, showrooms and sales centres closing to contain the spread of the disease.
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“Much more attention has been paid to online sales by developers this year, particularly after the pandemic. They have become more eager to attract buyers this way,” said Lu Wenxi, an analyst with Centaline Property’s Shanghai branch.
In July, Shanghai-based budget e-commerce platform Pinduoduo said it had sold about 1,000 units within the first 24 hours of a pilot home sales campaign. JD.com put 1,000 new homes in Beijing on sale during its 6.18 shopping festival in June.
Alibaba owns the South China Morning Post.
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