In an interview of Brotin Banerjee, MD & CEO, Tata Housing Development Company Ltd
How do you see the real estate market poised in India today?
From a sector steeped in murky deals to the one led by corporate entities, the Indian realty industry has undergone a tremendous change in the past few years. The transformation started since 2005, when government allowed FDI in real estate, which saw lot of interests from corporate and MNCs in this space. The next wave of transformation started with the entry of more number of corporate houses into the business giving the sector an image makeover. Led by corporates with strong business foundation, the sector started adopting corporate governance practice where corporate social responsibilities were given prominence and transparency has started to be the norm in the industry
Indian real estate has huge potential demand in almost every segment including commercial, residential, retail, industrial and hospitality, etc. The pan India demand for office space is estimated to be 196 million sq ft by 2013. The pan India residential demand is estimated to be over 7.5 million units by 2013 across all categories including Economically Weaker Sections (EWS), affordable, mid and luxury segments. (Source: Cushman & Wakefield)
There have also been radical changes in the dealings of the sector, which previously lacked ethics though is turning more investor-friendly with the onset of corporate governance, transparency and an increased sense of accountability among the players.
Why do you think that there is so much stress on luxurious lifestyle in real estate marketing these days, is that the only way to move ahead?
In a competitive market where there are multiple players, real estate developers are going all out to put forth their market differentiator. Luxury-lifestyle housing projects helps cater to a niche audience which is impressed by facilities such as club-houses, swimming pools or health clubs.
One cannot say if that’s the only way to move ahead as during slowdown or recession all developers who have been into premium and luxury projects quickly turn to affordable segments and when there is an improvement in the market, they go back to premium and luxury. Hence it totally depends upon the business model the developer is comfortable with.
As far as Tata Housing is concerned, we straddle across all consumer segments from value to luxury housing, by offering products ranging from Rs. 7 lakhs to over Rs 14 crores. We have launched a subsidiary company, Smart Value Homes Limited, that focuses exclusively on value and affordable housing while the parent Tata Housing focuses on developing premium and luxury residences. We have found successes in both the business model owning to unique process and technologies adoption.
In the next two years, what are the two trends that will define the future of the industry?
Two trends that will define the future of the Indian real estate industry are:
a) the emerging micro-markets. They are a huge potential for investment opportunities for both investors and end-users alike.
b) The evolution of the professional real estate investor. This includes the burgeoning middle class which has come out and invested in homes ranging from affordable to premium. They have been a huge catalyst in the growth of the real estate industry in India.
Can you shed some light on Tata Housing’s digital strategy?
Property buying is a high involvement decision and generally it occupies about 40% of an individual’s total net worth. Inevitably, property buying involves tremendous amount of research and innumerable interactions with various influencers. Most conversations these days at least in the SEC A & B segments of the urban society happen over the internet, via social media, blogs, forums, review sections etc. As marketers, our approach towards digital is two pronged, one is to be present in all these conversations via internet advertising through Google adwords, banner ads, pay-per-click and pay-per-impression campaigns.
The second is engaging with prospects over the long term by using social media and integrating our marketing initiatives with our social media outreach through non-business content which is aimed at striking a conversation with people belonging/aspiring to a certain kind of lifestyle and engaging with them via various marketing activities.
The results have been phenomenally encouraging, in case of our Pune project – Inora Park, entire phase 1 was sold through online space. Also, for our other project in Talegoan, Pune, we have been able to fetch 25% of our sales via digital at hardly 10% of the cost as compared to print.
We have driven engagement using various applications on platforms such as Facebook, where we developed unique applications such as Love U My Home, La Tomatina etc., while on Twitter our hash tags were trending on few occasion as well. As an extension of our brand philosophy we reach out to younger audiences who eventually grow into Tata Housing customers. Various engagement platforms have led us to have more than 88000 fans on Facebook.
As an industry, what do you think real estate players should be doing to bring trust and transparency in the business?
The government needs to focus on the real estate sector as it is the second-largest employer, next only to agriculture. Growth in this sector has a direct impact on the ancillary industries like steel and cement and it creates a ripple effect in the market and helps push the economy. I also believe that there is a strong need to set up a real estate regulator to ensure fair play and transparency in the industry and protect consumer interests. The main idea is to create a level-playing field.
Source: Marketing Booster