Muhammad Najib Razali (mnajibmr@utm.my)Universiti Tun Hussein Onn Malaysia

INTERNET BUSINESS STRATEGY BY

PROPERTY COMPANIES IN ASIA

IntroductionThis paper presents the results of a study of property companies

in Asia on internet property marketing along the year of 2008.The implementation of Internet as a medium of marketing is one

of the present-day debatable topics in the evolution of business. This is due to the emergence of information and communication technology worldwide.

Thus, this study attempts to examine the evolution of internet business strategy by M.N Razali (2007 ) and M.N Razali (2008) focusing on property companies in Malaysia.

Data was collected from various real estate related companies’ web sites. The services and information offered in these web sites are discussed and used to describe the growth of internet usage in the real estate business.

The study will give significant contribution to property industry in Asia in order to improve the competitive advantage in global real estate markets by using internet strategy as a tool.

Internet Penetration in Asia 2008No. Country Population Internet

Penetration (%)

1. South Korea 48 379 392 76.12. Japan 127 288 419 73.83. Hong Kong 7 018 636 69.54. Singapore 4 608 167 67.45. Taiwan 15 140 000 66.16. Malaysia 25 274 133 62.87. Brunei Darussalam 381 371 46.28. Macao 545 574 43.69. Vietnam 86 116 559 24.410. Philippines 96 061 683 21.5Source : Internet World Statistic (2009)

Internet User and Population for AsiaAsia Region

Population

% of Pop. Of World

Internet Users

Penetration

User Growth (2000-2008)

Users% of World

Asia Only 3 780 819 792

56.3% 657 170 816

17.4% 474.9% 41.2%

Rest of the World

2 929 209 278

43.7% 939 099 292

32.1% 280.7% 58.8%

World Total

6 710 029 070

100% 1 596 270 108

23.8% 342.2% 100%

The focus will be on the evolution of internet usage as a business strategy. The approach of this research is by using a company’s web site or desk research.

Some variables have been identified as elements in internet business strategy. Comparisons with the companies’ sites are also included. Similar with Rowley’s (2004) survey, the aspects of customer service delivery through property portals are profiled under several headings; contents, links, search facilities, and registration.

Research MethodologyThis paper examines selected web sites of property

development companies in Malaysia, Singapore and Hong Kong. These countries contribute $816 billion commercial property investment value in global market in 2008 (RCA,2009)

Asian countries contribute 19% of investment value in commercial property in global market.

Only Top 10 companies from each country base on capital market were selected for this survey.

In addition, these samples were taken from each local stock exchange. These companies are more likely to have a web site and provide more information in their web sites. The data collected was based on visible information from the companies’ web sites.

In addition, a list of attributes pertaining to internet business strategy, referred to as internet business strategy matrix, is developed. Each web site was then reviewed and a score was given to develop an index.

Literature ReviewThe Internet technology gives an enormous impact to the way

of doing business. Several articles, including but not limited to Malewar and Smith (2003), Heinen (1996), Zumpano et.al. (2002), McDonagh (2006), Benjamin (1994), and also research done by Fisher Centre for Real Estate and Urban Economics (2000) discussed technology usage in the real estate industry.

In United States, most real estate firms and brokers that specialise in the selling of residential properties are members of a Multiple Listing Service (MLS). The information in MLS includes, but is not limited to, particulars such as the property list price, the number of bedrooms, number of baths, car storage, school zones, exterior and interior amenities, kitchen features and a listing broker’s comments (Gordon et. al, 2002).

From the web site point of view, Hammil (1997) emphasised that a good web site can be used for advertising, corporate visibility, brand name recognition, public relations, press releases, corporate sponsorship, direct sales, customer support and technical assistance.

Internet Business Strategy MatrixProduct Information

A Online Customer Service Centre

Buyer Guide Online Forum Company News

Frequently Asked Questions

Online Calculator

Credit/ Financial/ Services

Member Exclusivity

Product Search Engine

Track Record Information

Report/ Articles Property Visualisation

e-Payment Estate Agents Services

Top 10 Property Companies in Malaysia, Singapore and Hong Kong 2008

1. SP Setia2. IGB Corporation3. Sunway City4. Island & Peninsular5. Sime UEP Properties6. Bandaraya Development7. E&O Property Development8. Sunrise Berhad9. YTL Land10. Glomac

11. SC Global Development12. Sunshine Holdings13. Fortune Real Estate14. Hiap Hoe Limited15. Keepland16. Guocoland17. UOL18. Ying Li19. Sim Lian20. K-REIT

21. Cheung Kong 22. Hang Lung Group 23. Henderson Land Development 24. Sun Hung Kai Properties 25. Sino Land 26. China Overseas Land & Investment 27. Shimao Property Holdings 28. China Resources 29. Country Garden 30. Sino-Ocean

Attributes 1 2 3 4 5 6 7 8 9 1

011

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Sc2

Product Information

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 30

Customer Service

x √ √ √ √ √ x x √ x √ √ √ √ √ √ √ √ √ x √ x √ √ √ x √ √ √ √ 23

Guide for Buyer

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 30

Online Forum x √ √ X x x x x x x x x x x √ x x √ x x x x x x √ √ √ √ x √ 8

Company News

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 30

Frequently Asked Question

x x √ √ √ √ √ x √ x √ √ √ √ √ x √ X x √ √ x √ √ √ x √ x x √ 19

Online Calculator

√ x √ X x x x x √ x x x x x √ x √ √ x x √ x √ x x x x √ √ √ 11

Member Exclusivity

√ √ √ X x √ x x x √ x √ √ √ √ x √ √ x x √ x √ √ x √ x x x √ 15

Product Search Engine

x √ √ X x √ √ x √ √ x √ x x √ x x √ √ x √ x √ √ √ x √ x x √ 16

Company Track Record

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 30

Report/ articles

√ √ √ √ √ √ x √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 29

Property Visualisation

√ √ √ X √ x x x √ x x √ √ √ x x √ X √ x x x √ x x √ x √ x √ 12

Financial Services Information

√ √ √ √ x √ x √ x x x x x x √ x √ √ √ x √ x x x x √ x x x √ 12

Estate Agent Services

x x √ X x x x x √ x x x x x √ x x x x x x x x x x √ x x x x 3

e- payment x √ x X x x x √ √ √ √ x x x √ √ x x x x x √ x x x √ √ √ x √ 12

SCORE 9 12

14

7 8 10

6 7 12

8 8 10

9 9 14

7 11

11

4 6 11

6 11

9 9 11

10

10

7 14

Property Companies’ ScoreNo. Company Country Score (%)1. Keepland Singapore 93

Sino Ocean Hong Kong 93

YTL Land Malaysia 93

Sunway City Malaysia 93

5. IGB Corporation Malaysia 80

6. UOL Singapore 73

Ying Li Singapore 73

Handerson Land Development Hong Kong 73

Cheung Kong Singapore 73

China Overseas Land & Investment Hong Kong 73

11. Sunshine Holdings Singapore 73

Shimao Property Holdings Hong Kong 73

Bandaraya Development Malaysia 73

China Resources Hong Kong 73

No Companies Country Score (%)15. SP Setia Malaysia 60

Fortune Real Estate Singapore 60

Hiap Hoe Singapore 60

Sun Hung Kai Properties Hong Kong 60

Sino Land Hong Kong 60

20. Island and Peninsular Malaysia 53

YTL Land Malaysia 53

Glomac Malaysia 53

Sime UEP Singapore 53

24. Island and Peninsular Malaysia 46

Sunrise Berhad Malaysia 46

Country Garden Hong Kong 46

27. E&O Property Development Malaysia 40

K-REIT Singapore 40

Hang Lung Group Hong Kong 40

Sim Lian Singapore 40

FindingsInternet Business Strategy Attributes’ Score

No Internet Business Strategy Score (%)

1 Product Information 100

2 Customer Service 66

3 Guide for Buyer 100

4 Online Forum 26

5 Company News 100

6 Frequently Ask Question 57

7 Online Calculator 30

8 Member Exclusivity 50

9 Product Search Engine 43

10 Company Track Record 100

11 Report/ articles 90

12 Property Visualisation 40

13 Financial Service Information 33

14 Estate Agent Services 10

15 E-payment 40

No. Attributes1. Product Information

Guide for Buyer

Company News

Company Track Record

5. Report/articles

6. Customer Service

7. Frequently Ask Question

8. Member Exclusivity

9. Product Search Engine

10. Property Visualisation

E-Payment

12. Financial Services Information

Online Calculator

14. Online Forum

15. Estate Agent Services

Attributes Score Ranking

Ranking by Country (Mean Score)#1 Malaysia : 65.4

#2 Singapore : 58.4

#3 Hong Kong : 55.5

Company Mean Score = 0.73

0

0.1

0.20.3

0.4

0.5

0.6

0.70.8

0.9

1

0 5 10 15 20 25 30 35

Rank Correlation between Companies

0 5 10 15 20 25 30

Internet

0

5

10

15

20

25

30To

p30

S.P SetiIOI Prop

IGB CorpSunway C

MKland HSime UEP

Bandar RBoustead

Island aSunrise

Glomac BUDA Hold

E & O PrNaim Cen

PetalingYTL Land

Talam CoDijaya C

Paramoun

SelangorCountry

PlenitudDaiman D

PJ Devel Mah Sing

SHL Cons

Guocolan Pelangi

WCT LandLBS Bina

R Sq Linear = 3.025E-4

•There is weak relationship of internet business strategy between the property companies.

• Using Spearman’s coefficient of rank correlation between the two indexes, Rs = -0.2.

•Thus it is indicate that the internet business strategy in the property companies are not significantly correlated.

Conclusion This paper used property development companies’ web sites to investigate

the occurrence of internet business strategy among property developers in Asia. This study has limitations similar to other studies examining business strategy.

The sample of this study is limited to 30 companies in Malaysia, Singapore and Hong Kong.

Presently, some of the companies in there 3 countries have widely implemented such internet business strategy, particularly as an effective means of disseminating companies’ information and selling property. Customers will have a better idea with all the information needed about the property as well as the companies’ background provided. In addition, it will also add value to companies’ image and prestige.

Some of the companies are still use traditional way of marketing is still in use. Property development companies in Asia which have already attained world

class standards have vigorously adopted the web-based business concept. It is believed that internet business strategy will become a major way of marketing properties in Asia.