Five reasons why Tata Housing took risks to make profits

Take risk, if you win, you will be happy and if you lose, you will be wise! This goes with what Managing Director and CEO of Tata Housing, Brotin Banerjee has done. He took a risk in December 2013 when he decided to sell houses online. The real estate arm of Tata Group later joined hands with Google Online Shopping Festival to sell its properties online.

Banerjee’s experiment turned out to be a successful.

He said that the brand managed to sell over 50 properties in 2013. In fact, the first unit was off the block within 10 minutes of the festival going live. "This emboldened us and since then there was no looking back," Banerjee says.

Tata Housing sold more than 30 properties online, each with a price tag of over Rs 1 crore netting Rs 75-80 crore in 2014-15. In June 2015, it announced that it sold a villa worth Rs 5.5 crore via its eCommerce portal. "So far, we have sold over 1,500 properties online," he claims.

What was the reason behind it? Reasons for the company’s success are given below:

1. Transparency: The sheer convenience of buying quickly in the most transparent manner, without the involvement of any intermediaries, is driving people to try the online medium.

2. Internet effect: The fact that internet influences more than 50% real estate buying decisions, as suggested by a Google study last year. It revealed that online influence on realty transaction value amounted to $43 billion, including $31 billion for residential properties.

3. Trust factor: The most crucial element of online buying is the trust factor. "The Tata brand stands for trust. So the consumers know that the brand would deliver," said the MD and CEO of Tata Housing.

4. Ample information available online: The company feeds such buyers with a lot of information about the property and tries to make up for their lack of physical presence. There are 3D walkthroughs for projects which helps buyers see every aspect of the property online.

1. Digital marketing: This also helped the brand coupled with high decibel advertising. It made people to give a serious thought to switching to this medium.

In July this year, Tata Housing rolled out an online exhibition for an exclusive audience where they could avail a special offer of getting an extra room at no extra cost across 11 projects in seven cities.

And it's not only Tata Housing that's witnessing traction in online buying.

For real estate portal Magicbricks.com, online transactions occur when there is a combination of attractive discounts, strong developer reputation and units being priced at sub-80 lakhs.

Buying a house is not just a high involvement decision but also one that requires significant financial commitment, contends Sudhir Pai, CEO of Magicbricks.com, a division of Times Internet, the digital arm of Bennett, Coleman & Co. Ltd (BCCL), which publishes newspapers such as The Times of India and The Economic Times.

"Therefore, while consumers are increasingly using online for discovery, research and for decision-making, they prefer to transact offline," says Pai, adding that online influences over 70% of all property transactions.

(Image: Indiatimes)