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You must have heard the phrase – The Devil lies in details.
I’m often quoted by colleagues as saying – God lies in the next level of detail.
India has been a very enticing market for the last several decades for global real estate players. 140 crores population, fast-growing middle-class, and rapid urbanization… however, most have struggled to establish a consistent pan-India presence. Several well-known global firms such as RE/MAX, Century 21, and others have tried to establish a foothold but have struggled in their attempts.
Why is that?
Birds-eye analysis highlights some major obstacles:
- Customer trust is challenging to build across a country as diverse as India
- Strict and complex regulations that change for every state
- Limited access to capital
- Unorganised sector
- Slow adoption of technology
These are often the reasons cited for why only 6% of market share in Indian residential real estate is held by the top 10 developers. That said, these challenges are structural in nature and are faced by several industries.
Instead of looking top-down at why large developers don’t have a pan-India presence, let’s analyze why a small developer finds it difficult to scale beyond a locality of a city. 2 major reasons emerge:
- The developer’s brand doesn’t have the same consumer trust outside their locality
- The developer doesn’t understand the consumer preferences of other localities
Investment in marketing has solved consumer trust to some extent. However, I believe that institutionalizing investment in research of consumer preferences will be a game-changer.
Online D2C brands build out various consumer personas for their performance marketing campaigns. For example:
Consumer Persona: Snazzy Sarah
- Age: 28
- Gender: Female
- Location: Indira Nagar, Bangalore
- Occupation: Software developer
- Income: Rs. 80 lacks per annum
- Values: Sustainability, convenience, quality
- Hobbies: Yoga, hiking
- Personality: Health-conscious, environmentally aware, time-strapped
- Online behaviour: Active on social media, frequently shops online, reads reviews before purchasing
- Shopping behaviour: Prefers online shopping for convenience, willing to pay more for products that align with her values, values quality over quantity, interested in sustainable products and packaging, frequently purchases health and wellness products
These personas are not just used to run performance marketing, but also used in product development, sourcing considerations, packaging design and customer service. They help companies align all operations towards a common objective of catering to their customer’s end-to-end needs.
In the world of residential real estate, this level of granular consumer persona building is missing. In India, every locality has a different consumer persona and therefore research needs to be thorough before a single brick is laid for a project. A single, male engineer with 5 years of experience born and brought up in Bangalore is very different from an engineer with the same profile brought up in Delhi. Their needs, tastes, and preferences are poles apart even though on paper it may seem like they are very similar.
This exercise starts giving you insights into customer preferences, which can vary even within various localities of the same city. For example, for one section of society, the distance between their home and workplace might not be a crucial factor, but for another customer group, it might be the most critical factor. A short commute not only saves time but also saves money in the long run. By keeping track of the changes in customer preferences and adjusting their approach accordingly, real estate developers can provide customized solutions that meet the specific needs of each customer group, leading to better outcomes for all stakeholders.
For example, in addition to the parameters in the consumer persona for Snazzy Sarah, here are some additional criteria I use to do consumer persona mapping for family homes:
- Family size: Determines the size of the home they are looking for
- Family income level: Helps understand the social status they maintain and the locality they would prefer living in
- Lifestyle: Provides insights into the type of neighborhood and amenities they would like
- Monthly spending pattern: Gives an idea of how lavish an apartment they would prefer
- Likes and dislikes: Helps understand their preferences for a location in the city or on the outskirts
The more detailed developers get on this research, the better their project planning, execution, and sales. Investing in research to build out consumer personas not only helps developers understand the needs and preferences of their target customers, but it can also help them identify potential gaps in the market. By understanding the specific pain points and desires of different customer segments, developers can create innovative solutions that set them apart from the competition. Furthermore, by incorporating these consumer personas into their product development, marketing, and customer service strategies, developers can build stronger relationships with their customers and create a loyal customer base that will help them grow their business over the long term. In fact, I predict that companies that will set up decentralized, regional strategic business units with a research-first approach will emerge as leaders.
In conclusion, the devil may lie in the details, but the god of success lies in the next level of detail. To succeed in the Indian real estate market, companies need to institutionalize investment in research of consumer preferences. We need to hire better and build better internal mechanisms to see the fruits of this approach.
That’s all this week, folks! I’d love to hear your feedback and do reply with any suggestions or thoughts.
Keep learning, keep growing.
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