With proptech startup Propzy ceasing operations, VIR’s Bich Ngoc spoke with Doan Tung, chief marketing and growth officer from Houze Group, to discover how proptech businesses like Houze can reduce risks and if Propzy’s downfall will impact investment flows.
Technology is the decisive factor in the market in fields such as e-commerce and ride-hailing, creating fresh habits for users.
In the real estate market, there is a new concept of the technology-shaping market. This market is based on consumer psychology, regional customs and external factors affecting the behaviour of customers and investors.
In real estate transactions, technology development is intended to supplement business activities to become faster and more efficient, but it cannot replace humans. Technology will create a combination of face-to-face and online activities and improve the quality of real estate brokerage in the digital economy era.
Vietnam has more than 300,000 realtors, but only 10 per cent have practice certificates and have been properly trained. The quality of the broker will affect the proptech market and wider real estate market.
The financial market and real estate have always had a deep relationship: proptech would not be able to develop without applying technology in the financial sector. Real estate credit plays an important role in Vietnam’s business and real estate markets. As fintech grows, so will proptech.
Because the legal framework has been making positive adjustments to the market, proptech has to make appropriate and prompt changes.
Proptech in Vietnam is forecast to reach $10 billion by 2030, according to our data. In our opinion, there are three key pillars to unlocking the market.
Experience and understanding of the real estate market in Vietnam is the most important factor. Vietnam’s real estate market is a primitive and complex market. There are continuously positive adjustments from the government and local authorities. Therefore, experience will help proptech reduce expected risks.
Secondly, prestige with investors and real estate developers creates an advantage for proptech. Vietnam currently has more than 100 key real estate developers and more than 1,000 real estate brokerage floors, creating fierce competition. Accordingly, the reputation of the founder and the capacity of their teams must be convincing enough for the market.
Last but not least is the management and operation of a growing startup. Proptech and other fields require true corporate governance, which is the combination of many skills of the executive board. It must attract and retain talent, conduct business development, improve products, and operate processes. For Proptech, it is still necessary to combine tradition and technology to follow market changes and adjust accordingly.
Many examples demonstrate the potential and ongoing excitement of the Vietnam proptech market. The venture capital market in Southeast Asia is always vibrant, and Vietnam is one of the most important markets, with economic growth recorded as the highest in Southeast Asia, forecast to reach 8 per cent year by the end of 2022, according to the International Monetary Fund.
The Sequoia Fund has successfully raised $2.85 billion to invest in the Indian and Southeast Asian markets. Be Group, meanwhile, successfully raised up to $100 million from Deutsche Bank. Medici Vietnam announced successful fundraising for the Series A round from Jungle Ventures.
Proptech is an important area in the Vietnam startup ecosystem and certainly benefits from this. That’s why proptech startups continue to appear, successfully raise capital, and expand their businesses.
This is a group that has gradually accumulated enough experience and is confident in its business. The disadvantage, however, is the experience of the real estate market. Services are diversified, from brokerage and management services to real estate finance. Vietnam’s proptech market is now more vibrant and diversified in quality and quantity with the participation of many players, from traditional real estate businesses to technology companies.
After a period of research and development, traditional real estate enterprises with many advantages, such as exclusive products, rich experience, and strong finance, have scaled up their businesses. This is a group that is completely proactive in terms of resources when participating in the proptech playground.
Moreover, Vietnamese customers are increasingly favouring technology platforms and online transactions. According to Statista, the number of Vietnamese shopping online has reached more than 51 million, up 13.5 per cent on-year, and the country accounts for 15 per cent of the online shopping market in Southeast Asia.