This article is from WeChat official account:Eleven People in Finance and Economics (ID: caijingEleven), Author: Wang Bo, Zhang Guangyu, Editor: Mark, the title picture comes from Visual China

Shell Group announced on the afternoon of May 20 that the founder and chairman of the company Zuo Hui passed away due to “accidental deterioration of the disease”. The company will issue an announcement on corporate governance and other matters within 2 weeks.

Zuo Hui is the soul of the Shell Group and the largest shareholder of the company’s listing subject Shell Search (NYSE:BEKE). As of At the end of February this year, Zuo Hui held 38.8% of the shares

Zuo Hui was born in January 1971 and died at the age of 50. During his lifetime, he founded many leading companies in the industry, such as Lianjia Real Estate, Shell Search, and Ziru. In August 2020, Shell Search listing on the New York Stock Exchange, as of press time, the company’s market value is 59.5 billion US dollars, is the world’s largest listed real estate trading platform.

The belief in good products, long-term determination, belief in technology, and capital blessing are the four elements of Lianjia/Shell’s success, which are closely related to Zuo Hui’s personality.

During his lifetime, Zuo Hui also served as the vice president of Beijing Real Estate Intermediary Industry Association, and vice president of China Real Estate Appraisers and Real Estate Agents Association.

After Shell released the news of Zuo Hui’s death, a reporter from Caijing contacted several Shell employees as soon as possible.

“The sky is falling, and faith is gone.” A Shell’s first-line agent described her first reaction. As for the impact on the company, she said, “The company is too large, and the things involved are beyond my comprehension.”

A middle-level Shellfish employee was shocked by the bad news and said that he did not know his condition before. He believes that the biggest loss to the entire Shell Group by Zuo Hui’s departure is “the spiritual leader is gone”, but it will not have a big impact on the business, because Zuo Hui has been out of the front line for a long time, and several core businesses have been in command and are running well. Shell is Peng Yongdong, Lianjia is Wang Yongqun, and Ziru is Xiong Lin.

A senior employee of Shell said that everything in the company is operating normally, “Everyone is deeply thinking about the old Zuo, and reminiscing about his strength and spirit.”

“A lot of LPs (limited partners) called to ask us about the situation. The boss thought it was fake news and confirmed with us several times.” A staff member of a Shell’s main investment institution revealed that after the confirmation, the investor was shocked .

“Looking at it now, Peng Yongdong has been deeply involved in the company’s business in recent years and has grown rapidly. It is also possible that the old Zuo is cultivating successors.” The staff member told the Caijing reporter.

Peng Yongdong is the executive director and CEO of Shell Group. He joined the Shell Group from IBM in 2010, the predecessor of Lianjia.

Peng Yongdong

According to a number of people familiar with the matter, Shell’s main investors have always been aware of Zuo Hui’s condition and regard it as Shell’s biggest investment risk. But in the next few years, Zuo Hui’s condition was stable, and investors thought it could be cured. Unexpectedly, less than ten months after Shell was looking for a house on the market, Zuo Hui suddenly passed away.

It is reported that Zuo Hui suffered from lung cancer 9 years ago. However, the news has not been officially confirmed by Shell.

Shell wrote in the risk warning section of the prospectus: “The company’s business relies on the contributions of the directors and senior management team. If someone is unable to continue working due to resignation, accident, health or family, etc., the company’s business and The prospects may be significantly affected.” However, this tip did not specifically mention Zuo Hui.

Affected by the news of Zuo Hui’s death, Shell’s stock price fell more than 10% before the market. As of press time, the decline has narrowed to 9.09%.

Zuo Hui has been interviewed by reporters from Caijing several times during his lifetime. His greatest wish is to transform the real estate brokerage industry from an industry that “can’t do without cheating” into a “dignified” industry. Industry”, from income, social image, to a sense of professional accomplishment.

Photographed by a reporter from Caijing to interview Zuo Huishi on May 31, 2018

“He has done a lot for this, and has changed a lot, but the real estate agent group has not completely won the respect of the society.” The middle-level employee of Shell said.

Rewrite industry rules

After Shell’s listing, its stock price reached a peak of US$79.4 per share, and its market value was US$94 billion, or about 600 billion yuan, which is almost equivalent to the combined market value of China’s leading real estate companies Country Garden, Vanke, and Evergrande.

Yu Liang, chairman of Vanke, once privately commented on Shell’s search for a house, “it has given the industry a lot of inspiration. A company that sells houses and achieves such a market value is the power of technology + platform.”

Zuo Hui is a computer professional. After graduation, he worked as a sales company in a software company and established an insurance agency. In 1998, China’s real estate industry began to move towards marketization. At the end of 2001, Zuo Hui founded Lianjia, mainly engaged in second-hand housing transaction intermediary services.

In the past two decades, the real estate transaction industry has gradually moved towards professionalization and standardization. In this process, Lianjia has played the first role as the first person to eat crabs many times.

Lianjia, an offline vertical real estate trading platform founded by Zuo Hui, is a combination of 18-year-old Lianjia and 2-year-old Shell.

Different from the traditional real estate agency platform, Shell uses ACN based on the internal chain home system(Agent Cooperation Network, agent cooperation network ), real estate dictionary and online transaction process, basically solved the industry’s stubborn problems such as false housing in the real estate transaction and the uneven distribution of brokers’ benefits.

For decades, the real estate agency industry in China has been in chaos. At that time, real estate agents generally had no dignity because they had to deceive people.

The difference between a novice and a veteran is that the bottom line of the veteran is lower, and he doesn’t change his face when cheating, but he knows it in his heart, so he avoids his eyes and dare not look directly.client. Consumers (buyers and sellers) let the intermediaries’ bottomless torture complaints and lose confidence in all brokerage companies. Under the vicious circle, the turnover rate of the brokerage industry is extremely high, with an average working time of 6 months, and bad money drives out good money.

In order to make money without relying on cheating, Lianjia began to manually record disk by disk in 2008, and established a real estate dictionary, that is, the construction of a housing database, which accurately defines the house number, floor plan, supporting facilities and other information of each house. In 2011, in response to the market pain points of opaque and asymmetry of market information and many false listings, Lianjia successfully launched the “real listings” action for the first time in the industry.

The real estate dictionary lays the foundation for Lianjia’s digital and online road. In 2018, Lianjia upgraded to an open platform Shell Search, and hundreds of brands have successively accessed. In the past, the internal ACN collaboration mechanism of Lianjia was to serve internal brokers. After the establishment of the Shell platform, this standard and cooperation mechanism will be open to all brands that have joined the Shell Alliance.

The core logic of ACN is to split the process and divide the benefits. In the past, in the intermediary service industry, housing was the benefit. Every broker who got the housing covered his own hands and secretly looked for buyers. Even if the company’s Internetization requires brokers to hang on the Internet, in order to prevent others from stealing orders, most brokers also Will do everything possible to make a deal privately.

This has greatly affected the resource sharing, marketing efficiency and customer experience within the system. Each broker can only sell the real estate in his own circle. Once the client wants to see another house, he has to change the broker or even the platform.

In order to optimize the allocation of resources, Lianjia has formulated ACN rules to split the various links of the listing transaction, and each link corresponds to the entry of the listing, the holder of the key, the person who is watching the house, the person who trades the source, etc. , Each role will get a corresponding benefit share under the ACN system based on different contributions.

In the era of shell house search, the ACN system has gone through several rounds of iterations, but the original intention was based on an efficient service user and broker system.

As of December 31, 2020, Shell Search’s annual GTV was 3.5 trillion yuan, a year-on-year increase of 64.5% and a record high. Shell platform connected more than 490,000 brokers, a year-on-year increase of 37.9%; the number of connected brokerage stores exceeded 46,900, a year-on-year increase of 25.1%. The continuous expansion of online and offline networks, combined with the network effect of ACN and the platform effect of the people-shop model, has driven the rapid rise of various business segments.

BehindChallenger

The rapid growth of shells has eroded the market share of most players in the industry. Over the past three years, with the rise of shells, industry contradictions and competition have intensified. In order to prevent the shell family from dominating, online and offline intermediary platforms such as Anjuke and I Love My Home have organized many “anti-shell alliances”, and the industry scale is also growing rapidly in the joint.

Investigation Investment Consulting(CIC) predicts that by 2024, the total transaction scale of China’s housing market(GTV, new house + second-hand house + leasing) will reach 30.7 trillion yuan, and the brokerage service penetration rate will increase from 47.1% to 62.2%, which means that a second-hand house transaction intermediary service The market size will expand to 19.1 trillion yuan. At the same time, real estate-related services such as house decoration and real estate finance will increase from 7.9 trillion yuan in 2019 to approximately 15 trillion yuan. Taken together, the market size will exceed 30 trillion yuan.

Under the market dividend, shells are facing greater competitive pressure.

On April 28, E-House (China) Enterprise Holdings Co., Ltd. (02048.HK) issued an announcement announcing the acquisition of Alibaba Group< span class="text-remarks" label="Remark">(NYSE: BABA/09988.HK) holds 85% of the shares of Tmall Haofang Company. After the transaction is completed, Ali becomes the second place of E-House Major shareholder.

E-House’s 2020 financial report shows that its real estate agency service and real estate brokerage network service GTV is 513.4 billion yuan, about 14% of Shell’s. Judging from the homepage of E-House, its business model is exactly the same as that of Shell, and it has technical support from Ali.

E-House once stated that after the acquisition, it will dominate the development of Tmall Haofang, while Ali will use technology to support E-House as a real estate digital marketing and transaction platform.

On April 8, Anjuke, a subsidiary of 58.com, submitted a prospectus on the Hong Kong Stock Exchange. After that, Yao Jinbo accused Shell of monopolistic behavior in real estate transactions in the circle of friends, allowing users to choose one of the two, and claimed, “58 As a challenger, Anjuke fully entered the field of new house transactions this year.”

The 2020 annual report of Shell Looking for Real Estate shows that the company’s main business is mainlySecond-hand house transactions and new house transactions accounted for 43.37% and 53.83% respectively. New house business has replaced second-hand houses as the main growth point.

Although there is still a gap between Anjuke’s volume and transaction volume, Anjuke’s second largest shareholder is also Tencent. Anjuke prospectus shows that Yao Jinbo holds a total of about 58.8%, and Tencent holds 14.1%. Tencent’s shareholding in Shell is 11.6%.

In addition to Yiju and Anjuke, Xingfuli, a comprehensive real estate information platform wholly-owned by ByteDance, also targets Shell. From the original ninety-nine houses, handheld rental houses, understanding of the emperor, excellent and good houses, to the present happiness, ByteDance’s attempt to use the advantage of traffic to share the real estate market is clear.

Xingfu Li previously benchmarked Anjuke, but the traffic has soared this year, and the goal has been adjusted to benchmarking shells.

An analyst from the Shell Research Institute once said that Shell also pays close attention to the gameplay and layout of several top players in the industry. Ali has the technology, and today’s headlines have traffic, which are the advantages of entering the real estate intermediary trading platform. However, the shell’s moat is wide, and the combined forces of rival capital, technology, and flow will not be able to leapfrog in the short term.

Zuo Hui’s beliefs

Bao Fan, the founder of Huaxing Capital, once said that the transformation of housing to the Internet is a track that every investor dreams of. It is also a slow and long snow track. What needs more is the long-term belief.

An executive who participated in the whole process of Shell founding believes that from Lianjia to Shell, Zuo Hui did two things right: 100% strategic adherence, and fine-grained details to 0.01.

The shell model can be imitated, but the founding team has accumulated in the past two decades, how to formulate rules to ensure fair and efficient operation of ACN, as well as constant trial and error, but the genes and methodology of serving users and intermediary platforms are not easy to copy quickly .

Zuo Hui said in a letter to investors in the prospectus, “There are three things happening at the same time in many industries in China: the industry is very complex and the foundation is very poor, and the efficiency is extremely low; the experience of practitioners and consumers is very bad. ; The industry has a huge market size and growth rate. Three simultaneous events will make all practitioners face the temptation of short-term big opportunities, because they can achieve considerable growth without any improvement in efficiency and experience.

But this kind of growth will change the overall economy from shortage to surplus,The change from quantitative concerns to quality concerns ends when those survivors who adhere to long-termism will become market leaders.

The uniqueness of our organization lies in the firm choice of long-term interests, choosing to do the’right’ things rather than quick successes. We have a natural aversion to taking shortcuts. Doing difficult and correct things is our understanding and Believe in the way to success. We have experienced difficult ‘no output periods’ time and time again, and then ushered in long-term growth and positive feedback from consumers, thus strengthening this belief. “

Attached: Lianjia-Shell Memorabilia

  • November 12, 2001

Lianjia·Baoye was formally established.

  • 2002

Six stores, 77 employees.

From May 16th to 19th, the first time I participated in the personal house purchase exhibition at the Military Expo, I made my mark and sold more than 30 orders.

In September, Lianjia became an agency service agency for the “fixed-point transaction of public housing purchased and sold by the central government in Beijing”, and successfully completed the first transaction after the listing of Beijing’s “central housing housing”.

  • 2004

Lianjia is the first in the industry to propose “signing a tripartite agreement and transparent transaction”, which makes real estate transactions more sunny.

  • 2008

On April 18th, “Lianjia Online” was officially launched.

Lianjia began to collect real estate information and built a real estate dictionary. The phenomenon of “fake housing listings” in the industry has been reversed.

  • 2010

On June 9, reached a cooperation with IBM to promote the strategic transformation of Lianjia.

  • 2011

In May, Lianjia first advocated “real housing” to promote industry information transparency.

August, ten years of chain home, a hundred years of creativity. Lianjia launched a new brand identity.

  • 2012

On March 7, Lianjia held the “All Channel Real Listings” action conference to fully promote the promise of “Real Listings”.

In September, Zuo Hui started the “Seven Powers” tour, letting the Lianjia culture take root.

On October 15th, all ten Hangzhou Lianjia stores opened, and the 1000th Lianjia store—Hangzhou Zhaohui Store also opened.

  • 2013

On April 9, Lianjia’s “Five Guarantees of True Service” was released.

In September, the Lianjia Online National Station was launched.On November 19, Lianjia released the “Four Reassuring Service Pledges” to escort consumers.

July 16th, this day of each year will be determined as the real listing day of Lianjia.

  • 2015

On June 30, Lianjia released its new brand LOGO “Lianjia. Lianjia” to build a comprehensive real estate service platform based on the mobile Internet.

Lianjia Online officially changed its name to Lianjia.com.

Lianjia has reached strategic cooperation with Yicheng Real Estate, Deyou Real Estate, China United Real Estate, Full House, Cape of Good Hope and many other real estate companies to start a national layout.

  • 2016

Lianjia’s 15th anniversary birthday, on June 15th, the Beijing Lianjia link system was officially launched, which greatly improved the efficiency of brokers.

  • 2017

The party committee of Lianjia Group was established, and the company’s party building work has entered a new stage.

  • 2018

In May, the Lianjia National City General Manager Meeting was held in Shanghai. Lao Zuo gave the 4th generation professional brokers a specificThe digital portrait: 25512. It was also at that meeting that we set “National Lianjia, Quality First” as the brand declaration of Lianjia. In the same year, Shells went online to find a house.

On the 17th anniversary of Lianjia, Lianjia announced a comprehensive quality improvement plan, which covers the “30124” customer complaint response mechanism, the eight major national peace-of-mind service pledges, and a series of measures to improve the quality of practitioners and service quality, such as the undergraduate rate of 51% of brokers. Initiatives.

  • 2019

The national undergraduate rate of Lianjia has exceeded 30%, with a total of 109091 advance payments, and a cumulative payment of 1.709 billion yuan in security deposits.

4.0 brokers, Lianjia is becoming a national brand in the 4.0 era.

  • 2020

On August 13, Shell completed IPO(initial public offering) and issued 318 million shares(corresponding to 106 million ADS), accounting for 9.41% of the total equity, financing 2.12 billion US dollars. On the same day, Shell’s stock price rose 87.2% to close at 37.44 US dollars, and the company’s market value was 42.2 billion US dollars.

This article is from WeChat Official Account:Eleven Finance and Economics (ID: caijingEleven), Authors: Wang Bo, Zhang Guangyu