After the founder’s death, the company can continue to operate, which is the highest evaluation of him.
Editor’s note: This article is from the WeChat public account “20 Society” (ID: quancaijing_20she), author: Zhao Xiaotian, the nine commandments of the pig, editor: Luo Lixuan.
After the founder’s death, the company can continue to operate. This is the highest evaluation of him.
Zuo Hui, the founder of Lianjia, passed away at the age of 50. This is just one week away from him becoming the richest man in China’s real estate industry.
Leaving at this age seemed too sudden. However, according to a remote brokerage data, Zuo Hui had already suffered from lung cancer in 2013, but the treatment was in good condition at that time. In other words, for the past 8 years, he has been carefully planning for Shell, until today his condition suddenly worsened and he left suddenly.
Zuo Hui has a mantra, “persist in doing the hard and right things.” Lianjia Group, which he founded in 2001, is the first domestic real estate service agency to announce “no price difference” and advocate real listings. The “Shell Search House” launched in 2018 is the first domestic real estate information to realize real listings. Open platform.
The traditional real estate brokerage field has been in a state of opaque information and frequent vicious competition for a long time.
The intermediary must be proficient in finding houses, attracting clients, showing houses, facilitating transactions, and closing accounts. They need to complete the transaction alone to get the commission. Not only are different intermediary companies rushing for business, but intermediaries of the same company are also “grabbing” each other. Under the law of the jungle, intermediaries have low trust in the platform, serious brain drain, and low efficiency in real estate transactions.
In the past 20 years of business, Zuo Hui has truly changed this world. The emergence of Lianjia broke the status quo of the industry that used to be opaque in information, and the “black intermediary” was gradually replaced by the “white intermediary”. He broke the prisoner’s dilemma in the real estate agency industry, implemented a non-innovative industry model to the extreme, and brought the industry out of the barbaric era.
01 Zuo Hui is not here, the shell will follow.
Just one month before his death, in April 2021, in an interview with CCTV, Zuo Hui reiterated that he set the rule of “no price difference” for the company: “Everyone does business not only to make money, but also to make money. I feel that this kind of thing is wrong. If you can stand up straight and make money, why do you have to go to cheat and kidnap?”
Now Zuo Hui is gone, but the ACN model he vigorously promoted is still in operation. This business model aimed at industry pain points has broken the traditional real estate service platform model, and institutionally fulfilled Zuo Hui’s industry vision of “no price difference”.
In the past, the service role of a broker in a single transaction was not subdivided. One person, such as housing entry, maintenance, key, survey, “customer source referral” and “customer source dealer”, had multiple roles. This requires a very high level of professional experience for brokers, which can easily lead to poor viewing experience.
Meanwhile, traditionalThe profit model of real estate services is mostly based on the collection of port fees and advertising fees. Under this charging model, most real estate agents need to pay for themselves. In order to reduce losses as much as possible, they will enter as much information as possible to increase the coverage rate, and there may be a certain amount of falsehood.
In response to the shortcomings of the industry’s traditional model, Shell has implemented the ACN (Agent Cooperate Network) platform model. In short, it divides the broker’s working mode and divides the possible participants of the transaction into 10 roles. Let the intermediaries participating in any node can share the rewards.
In the real estate industry, a natural stubborn problem lies in the need to solve the market competition of “same room and same guest”. Increasing the transaction matching rate of listings can improve the company’s efficiency.
As a platform for the inevitable market competition, Shell hopes to reduce homogenized competition and achieve a win-win situation. Therefore, it puts forward an important indicator called “cross-store transaction ratio”, also called “my house he sells”: as long as the house in this store is sold, the higher the transaction ratio, the better the circulation of this listing on this platform , The higher the efficiency evaluation.
In the second year of Shell’s establishment, Sichuan, as a key market, once accounted for nearly 86% of cross-store and cross-brand transactions. The number of established brokerage brand stores has doubled, and 8 well-known local real estate brokerage brands including Lianjia, Deyou, Fufang, Yuantou, and Lixin have joined.
One result of this is: to maximize the internal circulation of listings and reduce the inefficiency caused by competition for listings among different stores.
Xu Wangang, the COO of Shell Search, summarized this approach as “strong rules” rather than “strong control.” All things that are good for cooperation will be encouraged, and behaviors that are bad for customers will be suppressed. In the end, the result achieved by Shell is that through the setting of technology and rules, the broker does not store the house and does not store the price, which is the most favorable behavior for the transaction.
The idea that Zuo Hui has repeatedly emphasized is to allow real estate agents to be dignified. Zuo Hui believes that if the broker only regards second-hand housing sales as a livelihood, rather than a long-term career development, it is difficult to imagine providing a good service when serving consumers.
He once said in an interview with Caijing: “It is hard for us to imagine that a broker can respect consumers without being respected, and I also feel that today’s consumers do not receive the dignity they deserve. “Therefore, promoting the professionalization of brokers is Zuo Hui’s long-term goal.
At the system level, Shell’s standard for evaluating brokers is not just a simple transaction rate, but also manages the spread rate by scoring. Brokers with small spreads will get extra points. Spread refers to the difference between the last transaction price, the contract price and the listed price on the system. The smaller the price difference, the better the transparency of the price of the house, and the more circulated on the platform.Good, and relying on the mutual reviews of stores to enhance effective cooperation between different stores. At the same time, points will be deducted from customer complaints, non-sold transactions, and housing leaks.
“If the efficiency of brokers can be increased by three times today, and the consumer experience can at least reach a positive NPS, the value of the entire industry can become very large,” Zuo Hui said. Only when the efficiency of brokers is improved can the consumer experience be better, and the entire industry can form a positive and virtuous organic cycle.
Relying on ACN’s platform model, Shell has solved the industry’s persistent problems within the real estate agency. It can be said that the shell is precisely because of Zuo Hui, so now it can do without Zuo Hui.
02 Do the hard and right things
It is hard to imagine that Zuo Hui is actually an unsuccessful salesperson. After graduating in 1992, he worked in many sales jobs, but all of them were mediocre because of insufficient communication skills. It is precisely because three years of sales work has not made any achievements, Zuo Hui realized that the most important thing to do is to give play to his strengths.
Zuo Hui’s strength lies in collecting information. Since he founded Lianjia in 2001, he has been doing such a thing-breaking information barriers and reducing the uncertainty in the transaction process.
The early real estate intermediary industry was mixed, and “black intermediary” was the mainstream of the entire market. Due to the extremely opaque information, the frequent occurrence of “price difference”, false listings and even forced buying and selling, renters were miserable for a while. Zuo Hui himself was deceived several times by black agents when he rented a house in Bei Piao in his early days.
As a victim of the “black intermediary”, Zuo Hui was also the first person to stand up and try to change the status quo of the industry. In 2004, Lianjia put forward the professional slogan of “transparent transaction, sign tripartite agreement, no price difference” for the first time, and wrote the shouted slogan as a big-character poster and posted it at the door of the store. After that, Lianjia further built a database, built a real estate dictionary, and officially launched the “Real Real Estate Action” in 2011 to achieve reliable and transparent information.
Zuo Hui and the Lianjia and Shells he founded have completely reshaped the pattern of the entire industry. Relying on a real estate dictionary with 226 million sets of real housing information accumulated for 12 years, Zuo Hui makes the entire real estate information market no longer have false information. Shell, the main “real estate listing”, has now covered more than 110 cities across the country.
However, Zuo Hui’s process of reducing information transparency is actually a process of enmity with the entire intermediary industry. To a certain extent, the nature of the intermediary industry is to sell money on information gaps. From Lianjia to Shell, Zuo Hui tried to break the information barriers of the entire industry step by step, which naturally aroused fierce confrontation in the entire industry.
After the Shell platform went online in April 2018, the “Anti-Shell Alliance” army was surging. Yao Jinbo, the founder of 58.com, first raised the anti-shell banner. On June 12 of that year, the founder of 58.com, Yao JinbocunThe Bureau, together with companies such as I Love My Home and Centaline Real Estate, held the “Industry-wide Real Estate Pledge Conference”. Their main direction of the crusade is that Shell uses this platform to “be both a referee and a player.”
In July 2018, Zuo Hui clarified this, saying that Shell is not to be both a referee and an athlete. Instead, Shell is likened to a “court”, hoping that all the agencies will play in it. ball.
“A fair and just agreement and rules maximize the benefits of Shell Platform. I hope that in the future there will be 100 brands on this platform, with one Lianjia and 99 others.”
Since 2019, with the expansion of Shells in second and third tier cities, in addition to the “Anti-Shell Alliance” led by Yao Jinbo, Jinhua, Shaoxing, Nanchang and other places have seen real estate agencies boycott Shells in the “Anti-Shell Alliance”. .
In the summer of 2019, Yao Jinbo’s “Anti-Shell Alliance” was further deepened. 58.com took the lead in World Union Bank, Tongce Consulting, and Centaline Real Estate and other companies to establish a new home selling platform “58 Aijia”. 58.com holds 45% of the shares. The largest shareholder. At the beginning of the establishment of the platform, the goal of “three trillion sales in three years” was proposed, which is considered to be the establishment of the industry group to resist shells.
However, in the past two years, Shell’s search for a house has not been strangled. Instead, it has successfully listed on the US stock market and has performed well in the past two years.
According to the first quarter financial report released by Shell Group on May 20, the total transaction value (GYV) of Shell Platform in the first quarter exceeded one trillion yuan (1.07 trillion yuan), an increase of 224.2% year-on-year, and Shell obtained from it Its revenue reached 20.7 billion yuan, a year-on-year increase of 190.7%, net profit was 1.059 billion yuan, and adjusted net profit was 1.502 billion yuan.
According to the data, as of December 31, 2020, the number of brokers connected on the Shell platform exceeded 490,000 and the number of connected brokerage stores was 46,900. If the number of brokers in the country at the time of the listing of Shell is calculated by approximately 2 million, Shell connects nearly a quarter of brokers across the country. According to Shell Group’s plan, its goal is to connect 1 million brokers, 100,000 stores and 100 brands. By the end of last year, this goal has basically been achieved in half.
The “Anti-Shell Alliance” formed by Yao Jinbo in the past has now collapsed. As the biggest achievement of the “Anti-Shell Alliance”, World Union Bank, one of the sponsors of “58 Aijia”, announced in December 2020 that World Union Bank, Tongce Real Estate and other companies have transferred all the equity of 58 Aifang ( 55%), 58.com acquired all shares for 357 million yuan.
In its reply to the inquiry letter from the Shenzhen Stock Exchange, the World Union Bank mentioned that 58 Aijia’s operating entity “Shanghai Winner” is still in the early stage of loss, with a net loss of RMB 95,738,300 in 2019 and a net loss from January to September 2020. 172 million yuan.
In the midst of controversy, Shell’s distance from the world’s largest real estate trading platform isGetting closer.
Zuo Hui once said that the mission and destiny of this generation of Chinese entrepreneurs is to solve the quality problems of basic products and basic services. Zuo Hui, who solved the most basic problems, gained the greatest respect.