Fangdd Network Group Ltd. (NASDAQ: DUO) (“FangDD” or the “Company”) is a leading property technology company in China.
The Company’s mission is to make it easy for real estate agents to do business and empower them to achieve their dreams. FangDD designs products and services to help agents on its platform grow and succeed.
Through innovative use of mobile internet, cloud and big data, FangDD is a pioneer of the property technology industry, or PropTech industry, in China. The Company has fundamentally revolutionized the way real estate agents conduct business through its products and solutions that help to connect them with essential business resources, including customers, property listings, capital and transaction data. FangDD’s software empowers agents to easily conduct business online, improve productivity and broaden the scope of their services.
To address the challenges faced by agents and make real estate transactions easy, FangDD has built, from the ground up, a suite of modular products and services powered by technology that simplify traditionally cumbersome processes in real estate transactions and allow agents and agencies to effectively grow their businesses. FangDD provides agents with a dashboard to manage their clients, listings and transactions history online with ease. FangDD also connects agents with essential business resources through a smart matching system and provides them with both insights and direct access to business intelligence tools to analyze data and optimize the running and management of their businesses.
A critical element of FangDD’s solutions is its property database. This database is one of the largest of its kind in China according to Frost & Sullivan. As of June 30, 2019, FangDD had 131 million properties in its database, covering homes listed for sale or for rent as well as those not currently on the market and verified through a comprehensive internal process.
FangDD’s technology-empowered products and services are easy-to-use and intuitive. As agents improve the way they conduct business and manage their day-to-day operation through the use of its products and solutions, they become increasingly dependent on the Company’s tools and services to source and execute real estate transactions. This enables FangDD to develop an agent-centric, open platform and build a marketplace where real estate agents complete transactions.
When agents open their online shops on the Company’s marketplace, FangDD creates unique profiles for them. Over time, the Company updates and populates these profiles based on their history on the platform, performance and expertise. With these profiles, the Company is able to better understand the needs of these agents and tailor its products and services for them. For example, FangDD matches agents with the most suitable listings as well as buyers, sellers, landlords and renters. The relevance of its recommendations increases the likelihood of successful transactions on the platform.
FangDD strives to be a one-stop shop for real estate agents and real estate transactions. In addition to facilitating transactions, the Company also provides access to providers of transaction-related services, such as third-party financial institutions. This has enabled its ecosystem to grow vibrantly and sustainably.
Five-Step Formula for Continued Growth
FangDD’s approach to helping agents do business can be broken up into five steps. This innovative model has helped drive FangDD’s success to date, and the Company believes it will continue to drive both its own success as well as the development of the industry as a whole in the future.
First, FangDD helps agents move their traditionally offline businesses online. Through innovative use of technology and data, its marketplace allows third-party real estate agents to establish online shops, conduct their business and to complete transactions online using a comprehensive suite of technology-driven products and services. FangDD also helps connect these agents to other agents, buyers and sellers of properties, and other transaction-related service providers. As an independent marketplace, FangDD does not hire its own agents and avoids conflicts of interest with the agents on the marketplace. Instead, FangDD provides the tools necessary to facilitate transactions and encourage marketplace participants to actively engage with one another.
Second, FangDD empowers agents to do more business in a better way through its technology-empowered products and solutions. In addition to providing the infrastructure to facilitate transactions and a forum for agents and other marketplace participants to engage with one another, FangDD provides customized products and solutions that help agents enhance the efficiency of their overall operations and do more online. For example, the Company has built a unique agent ranking system that helps establish an agent’s credibility and brand, based on both actual performance and user ratings. Using this system, FangDD is able to effectively match agents with the most relevant property listings, buyers, sellers and tenants based on each agent’s individual strengths, track record, and ratings.
Third, in addition to helping agents manage their businesses, FangDD facilitates transactions directly on its platform. FangDD’s innovative business model has made “closed-loop transactions” possible — a term it uses to describe a process whereby the major steps of a real estate transaction are facilitated through or completed in its marketplace. Not only does the Company provide agents with access to local and cross-regional and intra-city listings and buyers, but it also provides the services and tools required to complete transactions. As a result, as agents more effectively and actively engage in the Company’s marketplace, more transactions are facilitated through the marketplace.
Fourth, FangDD monetizes transactions and the relationship that it has with its agents. Through its marketplace and value-added services, FangDD generates two types of revenue—commission-based revenue and revenue from various innovation initiatives and other value-added services. As transaction volume increases, agents continue to use the products and services that FangDD provides, move more of their business online, and increasingly rely on its tools and resources to complete transactions. As a result, FangDD is able to more effectively monetize its relationship with the agents and the transactions facilitated or completed on the Company’s marketplace.
Fifth, FangDD continues to improve and innovate its technology, products, and services to improve the overall marketplace experience as well as broaden its revenue sources. As a result of the transactions that FangDD facilitates and the data that it accumulates, the Company has a deep understanding of its marketplace participants and a holistic view of their needs. This allows it to continuously innovate, provide additional products and services including other transaction-related services, and attract new marketplace participants.