Strategic cooperation between Aoyuan and Tujia (途家): Apartment – Buy one, free lodging on a worldwide scale
Date:2015-02-14
(14 February 2015 – Guangzhou) 14 February is Valentine"s Day for the western world, Aoyuan and Tujia officially announced that both parties set up a strategic partnership relationship. After having joined hands with Tencent to set up an internet O2O service platform, once again, Aoyuan joined hands, and this time with Tujia. This also signifies that Aoyuan Group has stepped out a critical step in its internet strategy.
Practitioners in the field consider that both Aoyuan and Tujia are pioneers in the industry, they have strategic patterns throughout China. The apartments of Aoyuan excelled Tujia in terms of sales quantity, whereas Tujia offer better ancillary value added services to apartments. The cooperation of both sides will help to gain purchase confidence of property owners in their projects, and thus promote the appreciation of the projects, which in turn enhance the competitiveness of the properties of Aoyuan in the market.
A year of transformation – Aoyuan actively "embracing" the internet
2014 is a year of drastic change for the real estate sector. The mobile internet greatly changes the life and spending styles of people. Successive climax of the new economic trends of e-commerce, O2O, online fund raising from the public arrive, they affect the business model of the real estate sector, various real estate companies have started to "embrace the internet". Year 2015 has become a critical year to see if real estate companies can adapt the transformation.
Guo Zi Wen, chairman of the board of Aoyuan proposed that they need to fully embrace the internet, innovate sales and marketing methods, he also pointed out the direction of strategic transformation of "Production along side transformation". For the year 2014 which just ended, Aoyuan signed contracts totaling RMB12.25 billion, or a year-on-year growth of 22%,the stable growth trend was kept.
On 15 January, Aoyuan Group announced the internet strategy. Mr. Yang Zhong, executive president said that the internet strategies of Aoyuan are formed by the idea of "healthy lifestyle concept + mobile internet technology", to fully consolidate the property development advantages of Aoyuan, actively utilize the internet technology and ideas, and make in-depth development of the "Customer first" concept, enrich its contents, and enhance its experience.
On top of the product upgrade based on "developing commercial and residential properties in parallel", Aoyuan actively transforms itself into a service provider by virtue of its experiences in regimen and healthcare, cultural tourism and science and technology education accumulated over the years.
Ensuring stable income for apartment owners via several cooperation methods
Aoyuan implements the product strategy of "developing commercial and residential properties in parallel" in the recent years, commercial properties including apartments account for approximately 40%. In contrast with residential flats, the investment nature and rate of return of apartments are more remarkable. How to generate a higher rate of return to property owners after they have bought Aoyuan apartments has been in the mind of Aoyuan.
At present, projects including Aoyuan City Plaza, Luogang Aoyuan Plaza and Aoyuan Beyond Era mainly signed management agreements with large hotels, they are leased back to the property owners at a reasonable rate of return with a certain number of years. For instance, Aoyuan City Plaza has cooperation with Vienna Hotels, a 10-year lease is guaranteed with "nil monthly mortgage payment", the rent can offset the monthly mortgage payment.
The innovative business model of Tujia satisfies the strategies of Aoyuan. Tujia.com was set up in 2011, it is an online platform providing quality resort apartments for tourists, through international advanced O2O model, over the internet it provides online enquiry and booking services for high end resort apartments in the tourist places; its call centre provides 24/7 customer services, it provides off-line distributive resort apartment services at five-star hotel standard.
As explained, there will be several cooperation methods under which Aoyuan will cooperate with Tujia this time, on top of the models of cooperative joint venture and equity joint venture between both sides, there is a "Stewardship plus custody" cooperation method. Aoyuan property owners can entrust their apartments to Tujia for operation, they enjoy the gains from the custody. They can also entrust Tujia to carry out comprehensive stewardship services to the properties. Through the "Tujia" platform, the apartments of the property owners can achieve operation or leasing, and gain income therefrom.
Real internet mentality: Buy one apartment, free lodging on a worldwide scale
This cooperation between both sides better shows the internet mentality: in particular the resort function of apartments by time period.
Following the continual and increasingly popularity of the domestic tourism market, vacation is becoming a trendy lifestyle. Tujia promises that within the service period, it will provide a "exchanged accommodation" service to adequately use the vacant time of the properties of property owners. This implies that when a property owner has bought a Aoyuan Property in a city, he can obtain the accommodation right of resort lodging in any city managed by Tujia.
It is learnt that currently Tujia already covers 170 cities in China, 135 tourist destinations abroad, there are over 130,000 properties online. To have a snowy trip in northeast China, then fly to Sanya for sea viewing, or enjoy hot spring bath in Japan, watch the barbarians in Africa, the property owner can live in the resort accommodation arranged by Tujia, to live in by exchange, this is the perfect resort life created by Tujia. The lodging is not only comfortable, but also cheap in price.
It is understood that the cooperation between Tujia and Aoyuan will first use Aoyuan City Plaza and Aoyuan Beyond Era in Guangzhou and Aoyuan projects in Fogang and Yingde in Qingyuan for pilot operation. This is also the key pilot project of AO intelligent apartment that Aoyuan creates.