Chinese property developers have found a sure-fire way to boost dwindling sales as buyers stay away from sales centres, fearing they might contract the dreaded coronavirus: live streaming.
Country Garden Holdings is the latest mainland company to jump on to the TikTok live-streaming platform, as it launches the biggest ever online property sales promotion in China to date.
The mainland’s largest developer by total gross floor area sold plans to offer 10,000 new homes across more than 60 cities on the video platform from 8pm on May 5. The company said discounts of up to 50 per cent on property purchases will be up for grabs during the two-hour variety show hosted by celebrities and pop singers.
Country Garden’s marketing strategy includes selling home coupons for 5.5 yuan (US$0.78), which can be redeemed for a discount of 55,000 yuan against a property purchase, distributing red packets worth 1 million yuan and giving away free hotel stays, travel vouchers and home appliances.
China’s property firms have been hampered by variety of factors that have weighed on the sector. First, it was the cooling measures introduced in 2018, which included price caps and limit on sales by the central government. Then came the Covid-19 outbreak this year, which led to lockdowns in dozens of cities in an effort to contain the spread of the virus, which also forced developers to shut down sales centres for weeks on end. As a result, the country’s economy shrank 6.8 per cent in the first three months of the year, the first quarterly contraction in decades.
Property was one of the sectors that was hit the hardest, with homes sales in China plunging by 20 per cent year on year in the first quarter, according to S&P Global Ratings.
“Demand remains highly dependent on consumer [and investor] confidence, which is not a sure thing given the global economic downturn,” said Christopher Yip, senior director at S&P Global Ratings. “For now, we maintain our base case view, which is that national contracted sales will drop 5 per cent to 10 per cent in 2020.”
Industry leaders have been highlighting the plight of the industry since March. Yu Liang, chairman of China Vanke, the country’s second-largest property developer by sales, then said that “survival is a real issue [for Chinese developers] now”.
The shift to the live-streaming bandwagon is paying off for companies as they have been attracting potential homebuyers and even boosting sales.
Evergrande’s live-streaming show on April 24 drew 6 million viewers and helped it to sell nearly 7,000 home purchase coupons worth 10,000 yuan for 99 yuan each. The country’s biggest developer by sales had put 38 homes on sale during the event, offering discounts of up to 600,000 yuan.
On April 15, Guangzhou R&F Properties sold a home in Kunming, in Yunnan province, for 738,000 yuan, down from the original price of 1 million yuan.
On April 4, Fosun Property Holdings sold more than 800 home purchase coupons for one of its projects in Hangzhou, riding on the popularity of Viya, one of China’s top live streamers.
Chinese President Xi Jinping is championing the role of e-commerce in boosting the economy. On April 20, during a visit to a Taobao live studio in Zhashui county, Shaanxi province, which was set up to sell black fungus, a local speciality, Xi praised the delicacy and said: “E-commerce is very important in promoting sales of agricultural products.”
According to China’s Commerce Ministry, the number of e-commerce live-streaming sessions crossed 4 million in the first quarter.
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