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Jul 24, 2020 07:07 pm ·

Beike Publicly Submits Prospectus to the SEC

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Jul 8, 2020 01:12 pm · PR Newswire

China's Answer to WeWork Ucommune to Go Public

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Jun 1, 2020 10:55 pm · qianlong.com

Ziroom: Leasing Houses with Credit Points

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Jun 17, 2019 01:41 am ·

Lianjia-backed Ziroom to Close USD 500 Million Series B Round of Funding

Ziroom (自如), the biggest rental housing platform, was reported to close its latest Series B round of funding led by its existing investors General Atlantic, followed by Tencent, Sequoia Capital, and Tiantu Capital, according to China’s tech media 36Kr. The transaction was valued at USD 500 million, suggesting the company’s pre-money valuation at USD 4.5 billion. The funding amount, a fair enough price under current China’s venture capital market, met the company’s expectations, according to people familiar with the matter reported by the media. The company is open to discussion for next round of funding if potential investors are interested, reflecting the rental housing player is attracting more venture capital investments. The fresh new financing injected in the firm nearly one year and a half after Ziroom announced its CNY 4 billion (USD 600 million) Series A round, which was led by US private equity firm Warburg Pincus, together with Sequoia Capital China and Tencent. Launched in 2011, Ziroom was a business unit of China’s residual brokerage Lianjia.com (链家). The company operates in nine cities in China, serving 2 million tenants and 300 thousand landlords. The total number of listings under its management has surpassed 800 thousand, well below its goal of one million that it had set to reach by the end of 2018. Nevertheless, thanks to its parent company Lianjia, Ziroom ranked at the first among its competitors including Xiangyu (相寓) and Danke (蛋壳) when it comes to listing number, according to data compiled by EqualOcean. Ziroom is running its business on a staggering high asset-to-liability ratio, which recorded 120.83% in 2017. The company aggregates scattered rental stock owned by individuals and refurbishes them into standardized homes and rents them out, generating quite an amount of payables to pay the landlords as a result. Another concern for the company is involving its unhappy customers towards air quality issue, though Ziroom is adopting some strategy to solve it.

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Feb 10, 2019 05:47 pm ·

Aiming at No.1 in Long-Term Apartment Rental, Danke is Going Full Speed Ahead

Though Danke (蛋壳公寓), a leading long term apartment rental brand in China, had gone through many hurdles and experienced quite a few tough moments since its incubation in 2015, the company successfully completed 5 rounds of financing so far, raised about USD 200 million already. Unlike its competitors such as Ziroom (自如公寓) and Xiang Yu (相寓), who relied heavily on their real estate mother companies, Danke started as an individual brand, independent to any real estate enterprise, fought the battles on its own, and unexpectedly acquired some smaller competitors such as Hangzhou ishangzu Technology (爱上租) recently, the largest long term apartment rental brand in Yangtze River Delta area. The company owns about 400,000 apartments now, ranking itself the second in long term apartment rental industry in China, right after Ziroom. Danke's ambition does not stop at being No.2 in the industry. The company made a series of steps towards crowning in the long-term apartment rental industry, including receiving USD 170 million in two rounds of financing in 2018 and acquiring ishangzu at the beginning of 2019. SHEN Bo Yang (沈博阳), the only investor in the company's angel round of financing, and the chairman of Danke, stated in an interview with Tencent Deep Web (腾讯深网) earlier in 2018, pictured the future for Danke, "A super unicorn in long term apartment rental brand in China, owning more than 1,000,000 apartments and valued more than USD 10 billion in three years' time from 2018". "Danke has entered the era of accelerated expansion". The pain both a house owner and a room renter have to endure Home rental is a hot business in China now and in the near future, "the market scale is about CNY 1300 billion (equals to USD 192.7 billion) in 2018, it is estimated to reach CNY 4600 billion (equals to USD 682.0 billion) by 2030". SHEN said in an interview, this is partly due to the government's support for the development of long term apartment rental industry since 2016. Also, the long term apartment rental scheme indeed solves the difficulties for some house owners in Tier one and Tier two cities in China. In an interview with ‎a reporter from China Economic Weekly (中国经济周刊), a landlord who signed the long term apartment rental contract with Danke named Mr. Wang mentioned his "solution" for the 90 square meter property valued at about CNY 10 million (equals to USD 1.5 million) in Beijing, close to the third ring road, "Leave it empty for ten years". Because like many other landlords in Beijing, he is afraid of troubles. Mr. Wang does not want to sell the house, nor does he wish to rent it. The reason behind this decision is: firstly, the intermediaries are not trustworthy; Secondly, difficulty in finding good mannered renters; Thirdly, being landlord requires a lot of care for the rooms being rented. Mr. Wang emphasized he had his own lives and job to care, does not want to pay much attention to the house which can only yield about CNY 100,000 rent a year. He chose to cooperate with Danke, who is arguably more trustworthy than the other intermediaries in the market; who can find well educated young professionals as renters, also who can take care of and manage their houses for the landlords.   Many renters experienced more shocking events during home huntings in the past when they had to deal with the unethical and unprofessional intermediaries spreading around in Tier 1 and Tier 2 cities in China. Many of them dominate the good room resources, lift up the rent and fool the renters with all good features and thoughtful services, but does not do as promised after the room is rented. For renters, finding a reliable source and a comfortable room to live, pay a reasonable amount to get the promised services offered by either the intermediaries or the landlords seems like a luxury they cannot easily afford to have. Based on the deep understandings of the pain for both house owners and the renters in China, Danke emerged as a trustworthy platform, which solves the problems for both sides. The company knows its responsibility in being a reliable party in the home rental industry filled with unethical players, fake agents playing dirty tricks to fool customers around. According to EqualOcean's observation and examination, most other platforms use fake photos on their sites; for example, three rooms renting use only one picture to present to the internet users, hence the true appearance of the room is hidden from potential renters. After the renter is lured to the property, the agents responsible will introduce other so-called "similar" rooms for him or her to view. The whole process involves cheating and lacks transparency in information sharing with the customers. However, Danke, insists on providing true pictures for each furnished room on offer on their websites and in their apps. Hence, the information provided for the customers is accurate and offers valuable reference when potential renters make decisions. If their apartment were being refurbished, they post pictures stating "Under Construction" for these properties and inform the viewer when these rooms will be available to rent. Customers can also go to their construction sites and have a preview of the room, even make suggestions on the colors of soft decors later provided by Danke for the room.    Safe rooms or the ones with safety hazards? Clearly, trustworthy is the key for Danke to win customers. Comparing to Danke, Ziroom had buried itself in a series of troubles in recent years: Previous Alibaba employee caught leukemia and died after moving into Ziroom apartment for half a year; in 2017, a renter of Ziroom property in Haidian District, Beijing was confirmed low white blood cell count, only equals to 60% of normal person's level after one year living in his rented apartment, later the official examination for the room reveals formaldehyde reached 2.3 times of standard level. In the same year, more cases were reported from Ziroom apartments in Dalian and Chengdu due to similar reasons. Tian Yan Cha.com (天眼查) recorded two court hearing notices because of renter's heath issues caused by Ziroom apartment's poor condition. The website also recorded dozens of other court hearing notices received by the company mainly due to conflicts in contracts between the company and the renters. While according to the same source, Danke received dozens of Administrative Monetary Penalties from the local bureau of Administration for Industry and Commerce, but no court hearing notices recorded regarding renters' health issues or contract conflicts. Arguably, Danke has already been leading in many aspects comparing to its competitors. If the company insisted on being trustworthy and reliable to both landlords and renters. Its future in terms of crowning in the long term apartment rental industry in China looks positive. More on Danke can be accessed in articles published later.

Analysis EO
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Analysis EO
Feb 1, 2019 06:00 pm ·

Facing an Army of Difficulties, Which Long-term Apartment Brand could Survive?

2018 has witnessed the huge meltdown in Long-term Apartment Industry in China. Followed by a series of long-term apartment brands' going bankrupt due to the shortage of funds, the industry is facing possibly the strongest pressure ever. Also, the environment at the beginning of 2019 does not seem very friendly either for these brands, which one could win in the coming battle this year and which among the new ones could successfully survive? The front runners Which one leads the industry? It seems the one with the largest amount of rooms does, at least, at the current stage. The table below gathers information of the room number the top long term apartment brands are controlling and some additional information: As the table suggests, in terms of the volume of rooms, Ziroom no doubt comes the first, while Danke, Xiang Yu, and Inboyu followed right behind. Uoko, Mofang, and YOU+ could be counted as the 2nd tier in the industry. Apart from Danke, all the other three brands are under their mother companies, Lianjia.com, 5j5j.com and Vanke, all three are the giants in China's real estate industry. The fact contributes to the success of the three brands in holding more room resources. Also, it made Danke's performance almost seem like a miracle. Danke just acquired another long term apartment brand Ai Shang Zu (爱上租) a few days earlier on 17th Jan 2019, obtaining all the assets, including 80,000 apartments. It also completed two rounds of financing, led by Tiger Global, Regent Capital and BAI the like, in 2018, which is agreed broadly in China as the toughest year for long term apartment companies so far. Further improvement need to be made via strategic cooperation Websites or apps these long-term apartments are operating could be bettered with photographs of the rooms offered featuring soft furnishings, such as a vase with fresh flowers, sculptures of cute animals, cushions of very special style, and maybe a carpet; These items can be deleted from or kept on the photographs showing to potential renters. Users could select the charming ones to keep in their chosen room, and the app or the website could automatically calculate the costs for these adding, it will probably range from 100 to several hundred, not too much for a new room renter. If the user was satisfied with the price and agreed to rent the room eventually, the chosen items will be kept for the renter when he or she signs the room renting contract. This allows mutual beneficial cooperation between soft décor companies and the long-term apartment brands, in the way that the soft furnishing company could promote their products on the websites of these long-term apartment managers, which enhances sales of their products, also, the long-term apartment operators could present more beautiful spaces in the photographs of the rooms offered with the aid from soft decors, therefore, attracts more potential room renters to consider choosing their rooms because they look simply better than other offerings. Also, if the potential renters do not fancy the soft decors, they could choose not to add anything else to the room and could preview the room without any extra decoration on these long-term apartment operators’ websites or the apps. Therefore, no cheating or hiding of information from the customers occurs during the entire process, while allowing more available choices to potential room renters. The long-term apartment operators could strengthen cooperation with tech companies in home furnishing and design companies, like Kujiale, to achieve the effects discussed above. More on Kujiale:No.1 Already, What's Next? – Kujiale's Expansion Plan that Full of Wisdom, and Cloud Rendering, AI, VR and AR, Kujiale is Trying Its Best The culprit of the high rent in China? Some Chinese people blamed that the emergence of long term apartment in China had lifted up the rent level; a typical 20 square meter room with basic decoration rented within the 5th ring road in Beijing could be around 800-1500 CNY/month (around USD 110-250) previously, after the long term apartment brands entering the market, the rent had risen to 1300 and above, only the shabby and narrow one single bed bedroom with almost no decoration still remains the rent below 1000 CNY/month, and they are very difficult to find. According to Chief Economist Yang Xianling (杨现领) from Research.ke.com (Under Lianjia), in August 2018, the rent per square meter of room space in Beijing has reached 88.6 CNY, which means a 20 square meter room would cost more than 1700 RMB per month. While in 2013, the rent per square meter of room space in Beijing was still around CNY 58.  Though these are facts, long term apartment brands cannot simply take all the blames for the elevation of rent level in Beijing. After all, as people's living standard rises in recent years, demand for quality homes is also surging, especially among the younger generations, say the millenniums; long term apartment fills the gap of young people fail in finding quality and cost-effective homes to rent in the Chinese real estate market. The mushrooming of long term apartments serve as a solution for society. On the other hand, businesses need to look out for better players, stronger competitors to find and secure their own competitive edge to compete in the market; long term apartment offers standardized maintenance services, security and privacy enabled by intelligent door lock for every room the renters occupy, also a variety of room design with style and quality facilities, of course, the chance of avoiding all the hassles in payment of monthly rent or quarterly rent as well as fee for gases and water via a convenient to use app on your phone, and not to forget, the extra efforts a renter needs to make to get along well with the landlord. All these features are the reasons why the rent offered from a long term apartment brand is higher than a room offered by a landlord or an agent of the house owner, and the improvement they made in terms of services and convenience give pressure to traditional individual landlords and the traditional housing agents in China. If you pay attention to the gradual increasing of rent level in China's home renting market, you could observe the elevation in the condition of the rooms, as well as the upgrade of the facilities arranged in the rooms offered by individual landlords as well. Hence, to put it positively, the long term apartment brands' entering of the market has elevated peoples' living condition on a reasonable amount of cost in China.

Analysis EO
Analysis · 2
Analysis EO
Jan 24, 2019 04:35 pm ·

Ziroom And CQC Cooperates For The Standardization Of Apartment Rental Industry

Jan 24, 2019 /EqualOcean/ - According to China Quality Certification Center's official website, China Quality Certification Center (CQC) has signed the Strategic Cooperation Agreement with Ziroom (自如) on January 22, which shows the cooperation of both parties on the standardization of apartment rental industry. Ziroom and CQC held the discussion meeting on the healthy and sustainable development of the apartment rental industry. The leaders from State Administration for Market Regulation, China Consumers' Association, Beijing Municipal Commission of Housing and Urban-Rural Development, Beijing Real Estate Agency Association, China National Institute of Standardization, China Quality Certification Center and Ziroom has joined the discussion. With the experts on the marketing side, consumers' side, agents' side, standardization and qualification, the discussion is valuable to the apartment rental industry. The outcome of cooperation and discussion is worth expecting and the reasons are listed below. On The Industry Level Ziroom, the company which is famous for its one-stop service for the tenants and precise remodeling and design in China, previously has been caught providing formaldehyde contaminated apartments to the tenants several times. September 2018, Ziroom is even sued for the death of a tenant for the formaldehyde issue. Even though Ziroom is not guilty as there is no clear correlation between the death and formaldehyde issue, Ziroom built its air quality detection system called Deep Breathe in October 2018. One month later, Ziroom upgraded its Quality Control Model to Total Quality Management and started to expose its supply chain and refurbishing process to the public eye. This time, the cooperation with CQC and the discussion with various organizations show the willing of Ziroom to provide better and standardized service to the tenants. The Millennials is the happiest generation in China, as this generation grows up in the environment of China's rapid economic growth. With no memories of hunger and poverty, this generation grows up with internet and mobile phones, they have a high standard for their living quality. According to the figure The Age Distribution of The Tenants in China below, 24% of the tenants have the age below 25, most of the tenants are 25 to 30 which covers 48%, and there is only 28% of the tenants that are above 30. As we can see, most of the tenants are the Millennials, which provides the new opportunity for the apartment rental industry. Hence, the internet industry grasps the customers' needs. Different from the traditional intermediary leasing model, Ziroom is an O2O company that provides professional housing asset management services. This O2O company leases the apartments from the owners and provides the precise remodeling and modern management to the tenants, which satisfy the high standards of the Millennials. Also, O2O companies like Ziroom provides a set of leasing solution and management for the tenants like bi-week housekeeping service, monthly installments of rents, Wi-Fi and other fees automatic separation, which provides convenience for the tenants. Hence, the new leasing model is becoming popular in China. However, the model gradually shows the defects and risks as the author listed above. It is necessary and urgent for the industry to standardize the apartment rental industry. On The Macro Level In China's floating population development report 2018, the floating population change has mainly three stages and the detailed data is shown in the chart below. The first stage is from the early 1980s to early 1990s, the average yearly incremental rate is 7% due to the removal of the restriction on the floating population. The second stage is from 1990 to 2010, the average yearly incremental rate reaches 12% as the Chinese economic reform creates better employment opportunities in big cities which attracts the labor force. The third stage is from 2010, and the floating population is quite stable and stays around 245 million. From 2010 to 2015, the floating population incremental rate dropped to 2%, and the floating population decreases a little from 2015. The stabilization shows the floating population has a large probability of reaching its highest point. Also, China has a 58.5% proportion of urban population according to the official data, which shows the urgent need for apartment renting in big cities. With the two reasons above, it is the best time for the government to standardize the apartment rental industry on a macro level. As analyzed above, with the real data and experience provided by Ziroom, and CQC's standardization and qualification experience for years, the cooperation of Ziroom and CQC could bring a healthier development of apartment rental industry in China.  

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News EO
Nov 28, 2018 09:03 pm ·

Ziroom Releases the First TQM Model, Exposes Its Supply Chain and Refurbishing Process to the Public Eye

Nov 28, LIU Qiushi(刘秋实), the head of Quality Management Department of Ziroom(自如), claimed the decision to undertake Total Quality Management(TQM) in Ziroom's supply chain and refurbishing process, covering every aspect of their service including R&D, supplier quality management, production quality management, after-service enhancement and quality improvement. Ziroom hopes to establish a fresh and assuring atmosphere by improving the whole supply chain through coordination of each department, reported by TMT Post. Endured three-month hardworking, Ziroom Reconfiguration Centre has finally upgraded from Quality Control Model to TQM Model. As the China's first rental housing unicorn, Sequoia China and Tencent-backed Ziroom aggregates scattered rental stock owned by individuals and refurbishes them into standardized homes and rents them out. Ziroom, a previous department of China’s largest real estate brokerage Lianjia(链家), has access to Lianjia’s database of rental properties. Ziroom was in a unique and competitive position to source and pitch its rental services offerings without the huge search costs that may bother many competitors. September, a widow sued Ziroom for her husband died of leukemia two months after the man living in the allegedly-formaldehyde contaminated apartment Ziromm provided. Ziroom was judged not guilty for there is no clear correlation between the disease and the apartment condition, according to Sohu. It is not the first time that Ziroom has been caught in the center of a formaldehyde-related media storm. Ziroom has made missions by setting up a program called Deep Breathe in October and published its air quality detection system to the public. The large scale of Ziroom's housing stock has always enabled Ziroom having an edge over its competitors, but the company just can't get enough. The company's asset-light balance sheets and revenues indicate that cost and time needed for maintenance upgrade will greatly affect the company's profitability. Unlike real estate developers, Ziroom always fears about that its apartments are not fully occupied. A high turn-over rate is essential. That's why the company keeps trying to reduce the time-consuming process in making over a new apartment. ——Author: LinYan.Write to LinYan at LinYan@EqualOcean.com 

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