Customers opening up to buy homes online: Tata Housing

Brotin Banerjee

CEO, Tata Housing  

talks to Sanjeev Sharma 

Indian consumers are now opening up to buy products that are not traditionally sold online such as real estate and cars. Brotin Banerjee, ?Managing Director & CEO, Tata Housing Development Company, says with the increasing penetration of internet, it seems to be the next game changer for real estate in India. According to reports, one in every two online real estate searches is to buy property and there is a $43-billion market opportunity here.

Q: Will real estate developers increasingly look to online commerce as a way to push sales? Are buyers ready to embrace this model?

A: Urbanisation has played a significant role in changing the lifestyles of modern day consumer. Indian consumers are now opening up to buy products that are not traditionally sold online such as real estate and cars.

With the increasing penetration of internet, it seems to be the next game changer for real estate in India as the industry is constantly seeking innovative and cost-effective medium to reach out to the prospective consumer.

A study by Google India states that the internet influences consumer behaviour with 7 out of 10 buyers knowing the exact brand and model they want to buy with the help of online research. Consumers now conduct an in-depth research on the developer, location etc. online before finalising the project.

Tata Housing pioneered online home buying in India. A move that redefined home-buying in India then, is now developing into a trend with several other real-estate developers and aggregator sites jumping onto the bandwagon. Looking at the growth of e-commerce in India and consumer outlook towards buying homes online, we anticipate at least 30% of our sales to come through the online platform in the next few years.

Q: What are the advantages of selling homes on e-commerce platforms as compared to brick-and-mortar shops? How much will home sales increase by going online?

A: The internet has shrunk the world, creating a common market place for buyers and sellers. Along with transcending geographic barriers, the medium tackles problems of time and convenience offering ease of transaction.

Studying this trend, Tata Housing introduced the concept of online home buying in India in 2013. Today, the company has listed all its projects online, from affordable to luxury, enabling customers to choose from a variety of projects in different locations. By offering complete project details, floor plans and a virtual walkthrough of our apartments, we aim to bring transparency to the entire home buying process.

Q: Why did Tata Housing want to sell houses online? What is the response?

A: It is quite common to see people buying apparels, accessories, mobile phones, books, appliances online. Studying this growing trend, Tata Housing pioneered online home buying in India when it partnered with GOSF 2013 to launch the real estate category. The company received an overwhelming response selling over 50 units in its value and affordable segment.

Today, after successful partnerships with GOSF, Housing.com and Snapdeal, a flagship online property – National Home Buying Week, our own home buying portal and the launch of an integrated payment gateway to enable homebuyers to complete the home buying transaction online, Tata Housing has sold 1,500 units online.

Q: Who are your potential buyers that prefer online portals to buy homes?

A: Over the past few quarters, we have observed that the trend of purchasing real estate online has picked up and consumers are now open to the idea of purchasing luxury homes online. Although the volume of sales of value and affordable housing may be high, luxury and premium segments of housing are also catching up.

Statistics have revealed a paradigm shift towards young investors and home buyers. The average age of buyers has decreased to 29-42 years in 2014 as compared to 31-45 years in 2013. Based on the in-depth analysis of customers who have booked Tata Value Homes online last year, it has been observed that 39% of these customers did so with the intent of living in them with their families. Around 59% of these customers did not consult any brokers or salesmen while making the bookings online. Around 56% customers considered the information made available to them online adequate to make an online transaction.

Q: Which are the emerging cities where people are buying homes online?

A: Tata Housing has witnessed a rising appetite for online sales from tier II and tier III markets, which jumped from 11% in December-January 2013 to 30% in January-October 2014. Online buyers have emerged from cities such as Patna, Chandigarh, Ranchi, Jaipur, Indore, Baroda, Surat, Mangalore, Mysore, Bangalore, Coimbatore, Trichy, Bhubaneswar, Leh, etc. In tier-1 cities, over 57% buyers were influenced by online research while in tier-2 cities, the impact was around 48%.