Zuohui: it’s hard to form a monopoly in this industry


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Wen / you beast
Source: animal building (ID: ishoulc)
Although as the owner of shell house, the world’s largest real estate trading platform, GTV (total transaction volume of the platform) is more than 2 trillion yuan, second only to Ali, Zuohui’s love of real estate is far less than that of Ma Yun.
In 2005, Zuo Hui, a native of Weinan, Shaanxi Province, who has been doing real estate business for five years, decided to buy his first house. After graduating from Beijing University of chemical technology, he worked as a software company sales, insurance agent, and later decided to do real estate transactions.
It’s a second-hand house of 80 square meters near Xizhimen, with a total price of less than 200000 yuan. For more than ten years, he moved ten times and was cheated many times by the intermediary.
In those years, Beipiao, who had not been cheated by the intermediary, was embarrassed to say that he had stayed in Beijing. At that time, the largest real estate agency in the capital was Zhongda Hengji. The boss Liu Yiliang dared to call himself a professional underworld.
Changing houses often makes Zuo Hui sad. It took him a month to look at the house. A lot of the house information was found on the pole. He went to contact the owner to see the house and set the price. The most troublesome is to handle the housing delivery procedures, both buyers and sellers are black.
The pain point is the starting point of many businesses.
For example, let Wu Yajun start to do developers, is also a set of 80 square meters of house. The first time she bought a house, she encountered a year delay in delivery. After checking in, the natural gas was blocked, the lighting was poor, and the elevator often failed. Later, when there was an opportunity to bid for land, Wu Yajun did not hesitate to become a developer himself.
Uncle Bao, a good friend of the beast God, was also punished when he bought a house for the first time. But the difference between people is that after being trapped, some people can become developers, others become the boss of intermediary, but Uncle Bao can only become neurasthenia and often wake up crying in the middle of the night.
In the official history of chain house, the first store opened in 2001. But in fact, Lianjia real estate exhibition center was first established in August 2000. Zuo Hui, in cooperation with Beijing Evening News, rented a basement in Junbo to hold a real estate exhibition.
The day before the launch, Zuo Hui and his colleagues had been busy all night, and then sat on the steps in front of the Military Museum, waiting for the day to break, feeling uneasy. Capricorn has always had a strong sense of crisis. At that time, he was only 29 years old and told his colleagues:
I don’t know if our company will be here next year.
The next day, at 8:00 on August 8, 2000, a huge stream of people poured out of the subway, and the real estate exhibition was once out of control like the Spring Festival transportation.
A new era of ships is coming.
Yesterday, Zuo Hui, 49, should have been up all night again.
His shell to find a house officially landed on the New York Stock Exchange. At 1:00 a.m. after the bell struck at the magnificent hotel in Beijing, he sent a circle of friends saying:
Today is just yesterday’s projection. The road of industry is extremely hard. Everything is just the beginning.
Shell’s shareholders are shining, including Tencent, Baidu, rongchuang, country garden, Huaxing capital, Jingwei China, etc. Vanke is also one of the shareholders of shell. I once asked Yu Liang why he decided to invest in the chain. He said:
Because Zuo Hui is an excellent representative of the real estate industry.
Yuliang and Zuohui are both Capricorn. Yu Liang is 6 years older than Zuo Hui. Once he told me that his biggest problem was his implicit character and not direct enough. Zuo Hui has also expressed this meaning to me. He said that his biggest shortcoming is that he is not good at communicating with people.
Both Capricorns are low-key, rational and determined. Once they identify a goal, no matter how difficult the process is, they will go forward meticulously.
What’s more interesting is that when looking for a team, Capricorn is also looking for a group of the same people.
But before six or seven years ago, even the real estate industry practitioners would not pay attention to intermediary companies. In early 2013, I had dinner with Wang Ke of yuxiang’an real estate. I asked him what company he was following recently, and he said that he was paying attention to chainers.
The company’s market share has risen rapidly and its organizational structure is clear.
I let out, and the topic passed.
After another chat with Deco, I asked him what company he was paying attention to recently, and he said that he was paying attention to chain family. Three people make a tiger. So I asked one of my colleagues to study the chain house. He came back and wrote a research article entitled:
Vanke may not surpass green space, but chain home.
It was in 2015. At that time, I told my colleagues whether the title was too floating.
Three years ago, Hu Baosen of Henan Jianye suddenly said at the meeting of Zhongcheng alliance that what kind of enterprise can make 130000 brokers work according to the same standard every day? Why do chain agents not only remember the names of hundreds of owners in the residential area,
Can you remember the name of the owner’s dog?
At that time, Hu Baosen was still talking about chain family. Three years later, Zuohui’s chain family has cracked into shells. There are not only 130000 brokers on this platform, but 450000 people. They have entered 103 cities, have 42000 stores and hold the household map of 220 million housing units in China.
It has become a self-contained behemoth, which not only scares all intermediary companies, but also makes real estate developers fear and question it.
In the field of big Internet, only today’s headlines, pinduoduo and meituan have made people feel this way in recent years.
Before the listing of left Hui, has been maintaining restraint and caution. I told him a few days ago that it may be only a matter of time before the market value of shells exceeds that of Vanke, the highest in the real estate industry. He asked me about the market value of Vanke, and I told him about 330 billion yuan. He immediately waved his hand and said, “there is still a gap, and we have never thought of surpassing Vanke.”.
We are all in the real estate category, but the difference is quite big, not very similar.
The listing place he chose was not A-shares, not Hong Kong stocks, but the United States. However, yesterday, August 13, 2020, shell closed up 87.2%, with a market value of US $42.2 billion, or nearly RMB 300 billion.
This market value far exceeds country garden and rongchuang, which is a trading distance from Vanke.
After 20 years of pioneering work, Zuo Hui drove a boat that was not too light to cross the mountain.
There is a paragraph that says that the ways to make money are all in the criminal law.

Zuo Hui understood this sentence more than 20 years ago. In 1998, when he started his business as an insurance agent for the first time, he knew that the introduction to the insurance industry was in the insurance law.
After work, he shut himself up in a cramped, stuffy office and studied the terms of insurance companies.
After entering the intermediary industry, Zuohui’s success lies in that he has found and adhered to the introduction of intermediary. The way to get started is actually a difficult but correct thing.
Zuo Hui once commented on Song Weiping, saying that real estate developers are a sideline to him. He takes the money from sideline business to do what he thinks is difficult but correct.
In the past ten years, Zuo Hui has been doing what he thinks is right. The core of these things is to eliminate the information asymmetry of the industry with the Internet, improve the efficiency and consumer satisfaction, and make the housing business no longer a black eye.
In 2008, he hired hundreds of people to count houses in more than 30 urban communities. Today, shell has announced that it has 226 million real housing information in 322 cities in China.
In 2010, at an event at Kuntai Hotel, a financial reporter said that the most valuable company in the industry should be to help consumers clear mines in the housing transaction process. But now most intermediary companies are buried mines.
Two minutes from Kuntai back to the chain home, Zuo Hui has not spoken. To the door of chain home company, he decided to do real housing.
Today’s young people who are used to watching houses on the Internet VR may not have imagined that it was almost the practice of the intermediary industry to eat price differentials and fake housing resources more than a decade ago. At the beginning of the discussion on the launch of real housing, the chain members were opposed to it, which means that a month’s port fees of several million were wasted.
Also this year, a 30-year-old named Peng Yongdong joined the chain family. The year before that, he worked as a senior consultant on strategy and change for IBM and worked on a strategic service project for chainers. The team has only three questions to answer:
Is it possible for the real estate industry to be nationalized? Do you want to do Internet? Is a broker a client or an employee?
Peng Yongdong firmly believes that the chain should do the Internet. After finishing this project, Zuo Hui simply dug up the whole team, including Peng Yongdong, and made the chain home network.
They also built a role-based information system, and finally formed the prototype of the shell, ACN (agent cooperation network).
In this cooperation network, the real estate transaction process is divided into nodes, brokers can cooperate with each other to complete a transaction. To put it bluntly, agents should not guard against each other. We can share money together.
Currently, on average, 7 out of every 10 transactions are cross store transactions; one transaction is completed by the cooperation of 13 brokers; the farthest cross city transaction is 3000 km away.
Intermediary, which is regarded as a middle-class industry in the United States, is just a helpless choice for many young people who can not see the hope of life in China. The average working time is only 8 months, which is shorter than your uncle Bao’s education time.
Zuo Hui is changing all this. The previous paragraph, the chain family, the brokers who came from famous schools, have refreshed many people’s understanding of this industry.
When meituan.com has shown the momentum of giants, Wang Xing said, “don’t expect a single company to dominate, nor do you expect to end the war.”. But in the field of real estate intermediation, it looks like the war is over.
The total annual sales of new and second-hand houses in China is more than 20 trillion yuan. Last year, shell has already won two trillion yuan, accounting for 10% of the market share.
This year, their share will be further increased. Real estate developers have also pinned their last hope on shells.
But Zuo Hui told me that the shell was far away from what he had imagined.
He wants to raise the consumer satisfaction of the intermediary industry from the current negative value to 30%, to make the efficiency of brokers and stores reach the food and clothing line in five years, and to increase the average working time of brokers to more than 30 months.
A few years ago, Ma Yun talked about big data applications in his speech. Speaking of the excitement, he said that I have all the bra data of Chinese women here. I will not say the largest province, but the smallest one is:
E-commerce giants are talking about big data, while o2o giants like to say that they have an iron army to push.
But compared with the chain brokers who do not have any legal holidays and sweep the buildings every day, they are scum. Many agents who can’t go on working in chain stores and become fitness coaches have posted on the Internet:
This is much easier.
In fact, many people did not notice that the shell which was listed yesterday has a symbolic significance – China’s first online Internet platform started off offline.
In the past Internet companies, data came from online transactions or social and location information. However, the data of shell 220 million housing units were swept out by hundreds of thousands of brokers step by step.
The value and significance of the largest and most complete house information in China is far greater than that of cups and takeout.
In China, there is an unwritten standard for an Internet company to enter the stream. For example, in 2016, Netease’s market value exceeded $30 billion, and it also specially published an article saying that it had entered a $30 billion club.
In 2018, the market value of pinduoduo is close to US $30 billion. In addition to saying that it is close to Jingdong, the media just ask why.
This year, when Baidu’s market value dropped to $30 billion, we simply turned the declining giant into a market value tool
US $33.71 billion = 1 degree.
The shell listed yesterday broke through once in a trading day. 450000 brokers got up and found themselves as Internet practitioners.
In the past two years, Mr. beast has talked with Zuo Hui several times. Sometimes we talk about shells, sometimes we talk about other things. I’ll take out some questions to share with you.
Beast house: you’ve been an intermediary for 20 years, but you haven’t sold a suite. How can you persuade others to sell?
Zuo Hui: I never persuade people to buy a house.
Beast house: but the core job of your agent is to persuade others to buy a house.
Zuo Hui: Yes, it’s very interesting. I have never sold a house myself. My understanding of the industry today is that the core of the industry is to let high-quality service providers gather together and cooperate better.

After the outbreak, I judged early that the real estate industry might be the first to recover. It’s not just China, it’s the United States. This is our opportunity. We are not very satisfied with the living conditions. We are not very good at living.
Beast building: the left boss has unconsciously guided us to buy a house.
Zuo Hui: in fact, today’s house purchase rate in China is about 20 to 25 percent, which is more reasonable. We are similar to the United States. Our nation does not love to buy a house as the common sense thinks.
Animal house: after pinduoduo’s listing, it has caused a huge controversy. Once, Huang Zheng talked to me. He said that the reason why there was so much controversy was that he lifted the table. You are lifting the table now. Are you worried about being targeted?
Zuo Hui: Frankly speaking, I didn’t target them. We have totally different ideas.
This industry is a very weak business opportunity confirmation industry. For example, meituan and didi said that I will give you a business opportunity. This is a very definite order.
In our industry, I give you business opportunities. I tell you that you want to buy a house. It is far from the realization of commodities.
Beast house: how is your relationship with Shi Yongqing?
Zuo Hui: no personal relationship. There are two big men in this industry, one is Shi Yongqing, the other is Zhou Junji. These two old men were very impressive. Later, boss Shi wrote about us.
When our company held a meeting, he was also invited to come. I want to let boss Shi come to see us. I think he is wrong. At the meeting are our most senior old employees, boss Shi told us about the concept of Zhongyuan. I think Shi Yongqing should let me go to their company for a talk.
Where is the difficulty in building a platform and ACN?
Zuo Hui: let me talk about one of our most pitiful things!
Three years ago, the whole nation was paying attention to school district housing. We have a team that has done more research on school district housing than Japan has done for about half a year. We have really made clear all the school district housing in Beijing and produced three books of such thick materials.
We were about to push the matter across the country and were stopped. In short, we have done the so-called consumption level data internally.
The difficulty of the platform lies in the fact that all brokers are reluctant to contribute real and valid data. Everyone wants others to contribute. But we’re going to set up a mechanism for everyone to take things out.
Beast building: shell has been made for two years now. How far is it from it?
Zuo Hui: it’s too far. It took us 10 years to build ACN (broker cooperation network) in a team of 10000 people; from 2011 to 2015, we used ACN in a team of 100000 people, but today it is only used in a team of 400000.
But it’s still a long way to go. ACN has three main objectives
First, improve consumer satisfaction, which is the so-called NPs value. The NPs value of the whole industry is negative. We hope to increase the NPs value of shellfish to 20% and 30%.
Second, improve the efficiency of the industry. At present, the efficiency of the industry is too poor, with an average per capita of about 34 million GTV and an average of 20 million GTV per store. The standard food and clothing line proposed by us for all stores is 50 million GTV per year, and the middle line is 100 million. We hope that in five years’ time, we will be above the food and clothing line.
Third, the industry has not yet completed the professionalization of brokers. The average working time of brokers is only six or seven months, and that of chain operators may be about 30 months. We will strive to increase the working life of shell brokers to more than 30 months in the next five years.
China’s business is sometimes very interesting, because the market is so large that it seems that we can achieve financial success without doing anything. However, this is not the case for us. We hope to achieve fundamental goals.
Beast house: everyone thinks that shells are too powerful. Now there are no competitors. They will kidnap the sales of real estate developers. What did you think of this matter later?
Zuo Hui: we are still very small today. In the whole industry, the market share may be about 10%, and the whole residential industry may be about 6.00%, so it is still very small.
It is very difficult for us to form an offline competition because it is too difficult for us to form an offline industry. For example, in the second-hand house, our biggest competitor in the future is the so-called parasitic mode. This year, many brokers in Beijing said that they would look for the chain house and go to the landlord to sign after reading.
The so-called parasitic pattern is what we will face for a long time.
Beast house: have you ever thought about why this parasitic pattern appears? Is it related to the high commission fee?
Zuo Hui: I don’t think so. If we all accept one point today, the market will shrink rapidly, good management groups will be lost, and the competitive mechanism will become a competitive mechanism.
The rate can be calculated. The core is to ensure the ratio between the average income of brokers and the average social income. We think that about 1.2 to 1.5 is reasonable. Without this ratio, it is difficult to have a group of more educated brokers willing to work in this industry and serve for a long time.
So I think it can be calculated. Our market share in Beijing is very stable, but we have not adjusted the rate for so many years.
The prospectus also said that the rate of new housing is about 2.6% and 2.7%. What we provide for new houses is poor efficiency. For developers, we must look at the financial cost. 75 or 80 yuan of sales of 100 yuan may be financing.
For example, there are 10% of the cost in a year, and there are seven or eight yuan of financing cost in the 100 yuan. We help to reduce the cost quickly. For him, one month is about 67% of the cost savings.
There is nothing to pay attention to. In the future, China’s new and second-hand housing rates will be around 2.5% to 3%, which is a relatively reasonable situation.
Beast house: how much impact does the fluctuation of real estate market have on shell?
Zuo Hui: when the market is good, the new house is good, and the second-hand house is also good; when the market is bad, the second-hand house is not good, but the new house is OK.
When the market is good, the intermediary penetration rate in the new house will be lower, but when the new house is good, the total plate is big, for example, when the market is bad, it is 10, when the good time is 15, you can make money; when the market is bad, the penetration rate is higher, you can also make money.

So many cities in China are not in a cycle. I think the real estate market has passed the stage of oscillation this year. Generally speaking, this is not our core consideration.
Animal house: you used to do insurance, then you went to the real estate industry. Now shell is the story of the Internet industry. How do you learn from the Internet industry?
Zuohui: Online + offline is our long established strategy.
Our understanding is that Internet thinking is naturally the C-end thinking, which is naturally from the perspective of consumers. There are a lot of resources in the offline industry that can be controlled, but not on the Internet. You can speak from the perspective of consumers.
Animal building department: Tencent is your two shareholders. What aspects does Tencent help you?
Zuo Hui: Tencent is relatively more investment oriented. They respect the management team very much and only help them not to make trouble. Tencent has done a very good job in this matter. It is a very comfortable shareholder and a strategic partner.
Beast house: what was your last anxiety about?
Zuo Hui: the company’s affairs can make me less anxious. The children of our family make me more anxious.
Beast house: do you have a favorite entrepreneur?
Zuo Hui: I can’t tell you immediately when you ask. But recently, I think Zhang Yiming is very great. It’s not easy. He’s very ambitious.
Beast house: you often mention the book broker in the middle. What other books have a greater impact on you?
Zuo Hui: platform strategy is a very old book, but we all need to read it internally.
I don’t think I read business books very much. I read a lot of books about biology and quantum science. I want to see what the relationship between these books and Buddha is. I received a traditional education, science and engineering background. It’s hard to say whether I believe it or not, but Buddhism has opened up a new world for me.
(statement: This article only represents the author’s point of view, not Sina’s position.)