How the leading Chinese real estate brokerage transformed into a digital platform business

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In recent years, Chinese internet companies have pioneered many innovations and trends that are followed and copied by big internet companies elsewhere, such as digital payments, super apps that allow access to several services from one single app and live streaming eCommerce. In traditional service industries such as real estate brokerage, a major Chinese player Lianjia’s successful transformation into the dominant housing platform Beike will no doubt offer inspiration and significant lessons to other companies inside and outside China as well. Beike (KE Holdings) began as Beijing Lianjia Real Estate Brokerage Co, founded in 2001. Beijing Lianjia grew rapidly to become the leading real estate broker in China and expanded nationwide. In 2018, Lianjia was transformed into Beike as an open online platform – www.ke.com, which is a housing information and transaction platform open to all real estate brokerages and competitors. Despite strong resistance from management over the concern whether sharing housing knowledge with competitors would detract from Lianjia’s competitive advantage, Beike’s platform transformation was a spectacular success and dramatically increased the company’s revenue sources and expanded its growth. A digital platform transformation that combines the powers of Internet and AI can enable significant value creation and expand a company’s ecosystem and growth potential. Beike represents a new wave of platforms that add further value on top of the information efficiency gains by also offering a management system that improves service quality and professional standards in the industry. By creating an industry-wide open platform, Beike was able to export its values and standards to the whole industry and have a bigger impact on changing the industry’s ethical and operational standards. Lianjia’s platform transformation into Beike has been extremely successful. After launch, Beike’s revenue increased by 60.6 percent from 2018 to 2019 and by 53.2 percent in 2020 to US$10.8 billion. In 2020, Beike facilitated over 3.6 million housing transactions on its platform and generated a GTV (gross transaction value) of US$536.3 billion. This is more than half of the GMV (gross merchandise value) of Alibaba - China’s largest eCommerce group. Today, there are still many industries which are very fragmented and plagued by a lack of quality standards and customer trust, such as the home repairs industry. Just as Beike has improved the real estate brokerage industry’s practices in China, a well-designed digital platform can lead to enormous gains in service quality, efficiency and trust in these other traditional industries.

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