After the 8-month operation, Beike faces its new structure change.
Recently, Lianjia (链家), the parent company of Beike (贝壳), holds its strategy meeting and announced several structural changes. Meanwhile, EqualOcean noticed that Beike’s Chinese legal entity pledged all of its shares to a company backed by Beike’s Hong Kong entity. A typical practice for Chinese companies seeking Hong Kong IPO using VIE structures.
Lianjia announced the following changes, according to the Chinese tech media 36kr.
Beike canceled its original Great South region, Great North region, and agency department. Instead it launched COO line which will integrate brokage, New Room services and franchise business and separated operations into northern, southern, eastern, western and central regions, covering 26 provinces and 91 cities.
It signifies that Beike will shift from fast expansion mode to internal integration mode for now with the aim of increasing internal cooperation efficiency and quality. According to its published data, Beike achieved its goal for 2018 in 6 months, it entered 95 cities, opened 19.96 thousand stores and managed 168 thousand brokers. Such growth could be contributed to Beike’s ACN (Agent Cooperation Network) promoting information transfers and connecting house, customers and brokers, verified housing supplies and remote room checking using VR technology.
There was a rumor saying Lianjia and Deyou, platform for the franchise, will be combined. Lianjia officially replied that Lianjia, Deyou, and Beike will operate separately to remain their key features.
Under the tighter government control on housing speculation, the increasing number of first-hand property inventories needs to be reduced. So, in 2019 Beike will put more emphasis on first-hand properties and work with property developers to help them market and sell properties. PAN Zhiyong, the vice-present of Beike, aims at annual online transaction volume for first-hand properties reaching CNY 200 billion in three years.
Overall, the responses from Beike were suggesting that changes were made to improve operational efficiency. Whether if it has attention to go public or not is still unknown till now.