Chain Home is a real estate-based O2O company. There are about three basic logics to understand real estate O2O, which form a closed loop and are indispensable.
The first is scale logic.
This kind of logic can be called logical paradox. For example, brokerage companies, generally small companies, have better profitability, and the mom-and-pop stores in a community may have better financial situation than small companies because of their small scale.
But once your scale breaks through 100 stores and reaches 200 or 500 stores, with the expansion of scale, scale traps will appear. After reaching a certain scale, your financial indicators will deteriorate, indicating that in this industry, traditional brokerage companies have no or lack of scale effect.
The emergence of the internet gives us a chance to get out of the curse of scale. Because of the intervention of the Internet, the proportion of capital and labor in this housing brokerage industry has changed.
In the past development stage of Chain Home, there was an IT stage, the core of which was capital, technology research and development and website investment, as well as some SE systems and TE systems. The investment of all technical systems has changed the production structure or cost structure of our traditional brokerage company. Therefore, the current chain home is based on a production structure completely different from the traditional brokerage company, which enables them to break the traditional scale trap, thus enabling the chain home to achieve better financial indicators on a larger scale.
This is the meaning of Zuo Hui's famous saying "Slow is fast". In the past, Chain Home did a lot of technical research and development and storage of the underlying platform. Now, the chain is eating this slow bonus.
In traditional brokerage companies, there are no core fixed costs except stores. However, it is precisely because of the investment in many systematic services, including the investment in the network, especially in the real estate dictionary, basic data, basic technology and application, that the fixed cost of technology accounts for a relatively high proportion in the production cost of chain home as an enterprise. Therefore, chain home can break the scale trap faced by traditional labor-intensive industry brokerage companies, or the dilemma of lack of scale effect.
Therefore, on the basis of a larger scale-70,000 brokers and 5,000 stores, the chain home can achieve better expansion and better profitability.
The second is the logic of scope economy.
I used to earn money as a broker, and I earned money as a tenant. What I earn as an apartment is the difference between apartments. Talking about chain home today means talking about chain home from the perspective of housing circulation. The so-called circulation, including leasing, new house transactions, second-hand housing transactions, ordinary leasing, apartments, finance, decoration and a series of services.
The so-called scope economy means that providing two services is more valuable and profitable than providing one service. The apartment products that Chain Home is doing now are freely related to their second-hand housing brokerage business to some extent, because Chain Home will freely help them with many things and their finances in the process of taking and leaving the house.
It is by mastering the transaction scenario that the chain can provide some services such as renting loans, down payment loans and wealth management around the transaction scenario. It is these services that make the profit source of chain home break through the commission income of traditional brokerage companies and make the structure of income and profit more diversified.
Therefore, the proportion of derivative income and derivative profit of chain home around transactions is gradually increasing. It is estimated that the financial income will account for 15% of the total income of the chain home this year, and the financial penetration rate is very high.
The third is the logic of network effect.
If the first two logics are offline business logics, then the third logic is online pure Internet logic.
What is the network effect, we can say from two simple cases. Chain Home now has nearly 70,000 agents. One more broker may bring more internal games, because one more broker will naturally have more fierce competition, and there will be many games and competitions.
Every time a person comes, it is more than just a clue. There are many guests and houses, customers who can't sell this pool or houses that can't be sold. Because of his arrival, there are 10 thousand more links. This is the typical effect of one more person. But whether to increase the effectiveness of links, improve matching efficiency, or increase the cost of games depends on management. Poor management is a game, and good management is the improvement of transaction efficiency.
We believe that the chain home has gone through such a stage. Chain home can provide valuable guidance to the offline behavior of brokers through the logic of the Internet and the underlying platform, and it can be traced back. After all, every broker's behavior always produces some tracks, which are well documented and each track has data.
Among the above three logics, economies of scale and scope have existed in the objective world for many years, and the network effect has existed alone for many years. But today, it is the first time to combine these three logics through the logic of real estate O2O.
The network effect we are talking about refers to the network effect of offline services. In the field of real estate, what chain home does is to logically integrate network effect, scale economy and scope economy. This is the source and basis for us to talk about chain home valuation, business model and future expansion. This is also the correct observation posture that a chain home should have.
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