Yang Zhong: Transformation of Aoyuan Group with an internet strategy, to serve as service operator for residential and commercial clients
Date:2015-01-20
Core reminder: The concept of internet strategy re-positions the role of Aoyuan to serve as service operator for residential and commercial clients, also we confirm the key point of client first, as well as a mindset of excellence, a mindset of platform, as well as our mindset of progress and innovation, these constitute our strategic thinking.
(20 January 2015 – Guangzhou) "2015 China Real Estate New Year Summit" organized by 网易房产 was held in Yuehai Sheraton Hotel. Yang Zhong, CEO of Aoyuan Group and Zhu Zhong Yi, honourable director of China Real Estate Industry Association, 贾康, CPPCC member, deputy chairman of China Finance Society, former director of Finance & Science Research Centre of Ministry of Finance, Sherman Lai, chairman of Centaline Group and other experts and scholars gathered under the same roof, jointly analyzed the marco-economic situations of China in 2015, studied the direction of real estate policies and predicted the property market for the new year ahead by means of thematic speech and discussion salon etc.
During the summit, several guests joined the discussion salon under the theme of "How the property companies lead the first opportunities under the "New Normal"?", the guest of this forum Yang Zhong, CEO of Aoyuan Group made an excellent speech. Below is the speech:
Yang Zhong: Personally, I think that the trend of the overall property prices of China should be a steady upward trend with volatility, this is an overall trend, but the first-tier and second-tier cities differ from the third-tier and fourth-tier cities, the volatility of first-tier city is smaller, the upward trend will be more remarkable, the third-tier and fourth-tier cities may be more volatile, the upside options, directions of options of price trend are more hesitant, to look a bit farther, ultimately, there will still be a stable rising trend.
Moderator: Today"s theme is about transformation. You are all brave divers of this industry, as well as frontline practitioners, since we are talking about a New Normal, since we have said there are changes in many real estate companies, such as some kick start diversification, some turn to light asset operation, some turn towards urban facilities service providers, some even increase investment in overseas projects, I do not know right now we are facing diverse paths for property companies, we would like to first ask the heads of the two property companies to talk about what strategies you have regarding the New Normal, are you perplexed and are there any methods for the transformation?
Yang Zhong: The current Silver Era should have more impact on property companies, the arrival of the Silver Era, in particular the impact made by the mobile internet is large not only on the property industry, but on the other industries as well. It brought about changes in the definition of property too, the work contents of traditional real estate developers, their work flows, even the profit formulae also have changes, under these circumstances, the transformation of property companies is a must. In the Silver Era, if you work well, transform fast, you may change from silver to gold, and even diamond. If you don"t do well, very probably, you decline.
For instance, we Aoyuan are also actively taking action, on the 15th we released an internet strategy, we confirm our internet strategic thinking. First the core of the strategic thinking is to reposition our role, to serve as service operator for residential and commercial clients, also we confirm the key point of client first, as well as a mindset of excellence, a mindset of platform, as well as our mindset of progress and innovation, these constitute our strategic thinking. We did a lot of work on strategic planning, among them, under the first strategic planning we will build up our ecology resources of internet strategies, with a mindset of cooperation, openness and win-win situation, we will build up (an environment) with clients as the centre, and with the participation of real estate developers, as well as a lot of social resources, a client platform, we have 5 platforms ourselves, we set up a linkage of 6 channels, at last with the support of Big Data, to work on this thing, this is the first part of our own internet strategic planning. This also includes cross-sector resource integration, this is the second part of strategic planning, we have also our own management measures, such as the marketing O2O platform aspects etc, we"ve made some improvement. There is also something very important, we Aoyuan have already built up a part, we are building up, something called the AO product series, we formulate a very good strategic planning, and then we also formulate some specific measures to achieve this. I think that property companies, Aoyuan also thinks this way, (should) seize this opportunity, in the Silver Era, probably property companies may do better than the past, these are basically some of my ideas.
Moderator: These are the views and methodology on transformation that Aoyuan bring us.
Yang Zhong: Regarding home purchase or stock trading, first it depends on the percentage (of your investment) in your personal assets, second it is your own ability in investing in stocks and investing in properties, you got to think clearly these two criteria, before you can get a conclusion.
Whether or not you should buy a property now, if make it simple, I think for first-tier cities, including Guangzhou, for properties with potential (of appreciation), no matter they are residential or commercial, they are worth buying. If you really don"t know what to choose, several products that Aoyuan are currently selling have very high quality-price ratios, you can take action.
Yang Zhong: For the price hike of properties in Guangzhou, I agree with the opinion of Mr Wu that why (property) prices in the first-tier cities will rise? Overseas investors, including rating agencies, many people do not realize that the properties in China are different from those abroad. Chinese have a racial feature about real estate properties that foreigners do not have, the sentiment and reliance of Chinese attached to real estate properties are something that many foreigners cannot understand Regarding Chinese people, you all know that they have such a characteristic, people want to excel others, they like very much succeed to show off and bring glory to their ancestors. Successful people, the features of their race, if they buy properties, they will go to the best locations, once such purchases have become a norm, the trend of property price hike in the first-tier cities is fast and remarkable. I am bullish about the prices of properties in Guangzhou, a first-tier city, when the prices of Guangzhou properties will rise, at the beginning of this year, people have some small action (attempt), in the Chinese New Year Aoyuan have also a concessionary initiative, but the majority of companies will raise property prices of first-tier cities after the Chinese New Year.